/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080728.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 28, 2008, Vol. 12, No. 178 Headlines 51 MILL: Case Summary & 20 Largest Unsecured Creditors ABITIBIBOWATER INC: Inks Consulting Agreement with T. Thorsteinson ADVANCED MICRO: Dirk Mayer Succeeds Hector Ruiz as CEO AERCO LIMITED: Fitch Affirms Ratings on Seven Note Classes ALEXANDER CITY SPECIAL: S&P Cuts Revenue Bonds Rating to BB+ ANTHONY TRIGONA: Case Summary & 20 Largest Unsecured Creditors AOT BEDDING: S&P Lowers Corporate Credit Rating to B from B+ ARCADIA RESOURCES: Amends 2008 Executive Compensation Plan ASARCO LLC: Alta Mining, et al. Can Hire Baker Botts as Counsel ASARCO LLC: Doe Run Objects to Anthony Laizure as Fund Monitor ASARCO LLC: NM Environment Dept. Opposes El Paso Smelter Reopening ASG CONSOLIDATED: S&P Holds B+ Rating After $55MM Offering Add-On ATA AIRLINES: Court Extends Lease Decision Deadline to Aug. 15 ATA AIRLINES: Plan Filing Period Extended to Feb. 26, 2009 AVISTAR COMMS: June 30 Balance Sheet Upside-Down by $14.8 Million BICENT POWER: Operational Issues Cue S&P to Put On Negative Watch BIRCH MOUNTAIN: Board Says Sale is Necessary to Regain Liquidity BLOUNT INT'L: Inks Amended Employment Agreement with R. Irving III BROADLANE INC: S&P Assigns 'B+' Corporate Credit Rating C-BASS CBO: Collateral Deterioration Prompts Fitch to Junk Ratings CHARMING SHOPPES: Alan Rosska to Receive $100,000 Monthly Salary CLARIENT INC: Stephen Zarrilli Replaces Brian Sisko in Board COLUMBIA COUNTY HOSPITAL: S&P Cuts $14.5MM 1999 Bonds Rating to B- DEXTER AVENUE: Case Summary & Five Largest Unsecured Creditors DOLLAR GENERAL: S&P Affirms All Ratings; Revises Outlook to Stable DOWNEY FINANCIAL: Moody's Cuts Bank Financial Strength Rating to D EMBARCADERO AIRCRAFT: Fitch Keeps 'C/DR6' Ratings on Three Classes FORD MOTOR: Improves Car Conversion Plan, Realigns Manufacturing FORSTER DRILLING: W. Scott Resigns as Secretary and Treasurer FRONTIER AIRLINES: Posts $60MM Net Loss in Year Ended March 31 GAYLE PROPERTY: Case Summary & Five Largest Unsecured Creditors GPS INDUSTRIES: Files Patent Infringement Suit Against Prolink GSAMP TRUST: S&P Puts Default Ratings on Two Loan Classes IESI CORP: S&P Affirms 'BB' Long-Term Corporate Credit Rating IKON OFFICE: S&P Holds 'BB-' Rating and Changes Outlook to Stable INFOGROUP INC: S&P Keeps 'BB' Rating Under Negative CreditWatch IRIDIUM SATELLITE: S&P Keeps 'B-' Rating on $170MM Facilities ISTAR FINANCIAL: Fitch Cuts Preferred Stock Rating to BB from BB+ IVANHOE ENERGY: Closes C$90 Athabasca Oilsands Assets Acquisition IXI MOBILE: Reduces Board Co-Chairman's Annual Salary by One-Third JED OIL: Needs Additional Capital to Fund Operations JIM PALMER: ActionView Seeks Legal Representative to Begin Talks JOY DYEING: Robinson Diamant Approved as Bankruptcy Counsel JOY DYEING: Files Schedules of Assets and Liabilities JOY DYEING: Markets Los Angeles Building for $9.7 Million JOY DYEING: Court Approves Postpetition Factoring Deal with Hana JPMORGAN CHASE: S&P Junks Ratings on Three Classes of Certificates KEY DEVELOPERS: Judge Williamson Approved Disclosure Statement LID LTD: Files Ch. 11 Liquidation Plan and Disclosure Statement LIFE UNIVERSITY BONDS: Moody's Rates Revenue Refunding Bonds Ba3 MAGNA ENTERTAINMENT: Completes Sale of Great Lakes Downs MATTRESS HOLDINGS: Moody's Cuts Corporate Family Rating to B3 MAXXAM INC: Inks Agreement with PBGC on PALCO Pension Plan MCCLATCHY CO: Revenue Pressures Cue Fitch to Cut IDR to B+ from BB MERRILL LYNCH: Moody's Puts Low-B Ratings on Series 2000-Canada 3 MERRILL LYNCH: Moody's Puts Low-B Ratings on Six Classes of Certs. MICHAEL ASHE: Case Summary & 14 Largest Unsecured Creditors MILLENNIUM INSTITUTE: Case Summary & 19 Largest Unsec. Creditors MIURA 2004-1: Fitch Junks Ratings on Three Classes of Notes MODERN CONTINENTAL: Taps Hinckley Allen as Special Counsel MODERN CONTINENTAL: Taps UHY Advisors as Financial Advisor MORGAN STANLEY CAPITAL: S&P Holds Low-B Ratings on Cert. Classes NATIONAL CITY: Posts $1.8BB Net Loss for Second Quarter of 2008 NATIONAL HOUSING: March & June 2008 Quarter Reports to be Delayed NRIC PROPERTIES: Voluntary Chapter 11 Case Summary PACIFIC LUMBER: Maxxam Inks Pact with PBGC on PALCO Pension Plan PALM INC: Weak Sales Cue S&P to Cut Ratings with Negative Outlook PIPER RESOURCES: Seeks Farm In Funding, Moves CCAA Stay to Aug. 5 PLASTECH ENGINEERED: JD Norman May Acquire Brooklyn, OH Plant Only PROXYMED INC: Gets Initial Approval to Use Laurus' $5.8MM DIP Loan QUIGLEY CO: Judge Bernstein Adjourns Confirmation Hearing Sine Die RAMPART MERCANTILE: CTO on Securities Removed, Reviews Options RED SHIELD: Judge Approves $1.2 Million Financing REVLON INC: Posts Preliminary Results For the 2008 Second Quarter ROCKFORD RIBS: Case Summary & 20 Largest Unsecured Creditors SEMGROUP ENERGY: Omnibus Agreement with SemGroup LP Has Terminated SEMGROUP LP: Bankruptcy Won't Affect SemGroup Energy Unit SEMGROUP LP: Affiliates Seek Protection Under CCAA (Canada) SEMGROUP LP: Ceases as White Cliffs Manager Over GECC Loan Default SHAW GROUP: S&P Lifts Rating to BB+ on Good Cash Flow Generation SIMDAG-ROBEL LLC: Files Schedules of Assets & Liabilities SIMDAG-ROBEL LLC: Wants to Hire Bush Ross as Bankruptcy Counsel SOLO CUP: Moody's Assigns Stable B3 Corporate Family Rating SOPHIA MEIMAROGLOU: Case Summary & 11 Largest Unsecured Creditors STRATLAND ENTERPRISES: Voluntary Chapter 11 Case Summary TABERNACLE CHRISTIAN: Case Summary & 20 Unsecured Creditors TARGA RESOURCES: S&P's 'BB' Rating Unmoved by New Commodity Swaps TAYLOR DIAGNOSTIC: Case Summary & 20 Largest Unsecured Creditors THORNBURG MORTGAGE: T. Cooley Replaces Resigned Director in Board TOYS 'R' US: Fitch Holds Ratings on Operating Strategy Success TRIZETTO GROUP: Moody's Assigns Stable B1 Corporate Family Rating TRM CORP: Approves Amendment to 2005 Omnibus Stock Incentive Plan TROPICAL INN: Wants to Employ Buddy Ford as Bankruptcy Counsel VANTAGE LOFTS: Taps Acceleron Group as Financial Advisor VERIFONE HOLDINGS: NYSE Grants Continued Listing Until October 31 WACHOVIA BANK: Moody's Cuts Rating on Class H $41.2MM Notes to Ba2 WASHINGTON MUTUAL: Analysts Predict Capital Need After $3BB Loss WATERBROOK PENINSULA: Section 341(a) Meeting Scheduled for Aug. 5 WATERBROOK PENINSULA: Can Hire Messana as Counsel on the Interim WATERSTONE LLC: Taps Cecilia Rosenauer as Bankruptcy Counsel WINDY CITY: Section 341(a) Meeting Scheduled for July 29 WINDY CITY: Wants to Employ Tim Coker as Bankruptcy Counsel * S&P Says NY MTA in Short Supply of Options to Deal with Deficits * Fitch Reviews & Holds All Outstanding Dealer Floorplan ABS Notes * S&P: Investment-Grade Composite Credit Spread Higher at 256 Bps * S&P Still Expects a Mild, But Long Recession * S&P Chips Ratings on 71 Tranches from 81 Cash Flow & Hybrid CDOs * Moody's: Support to Fannie Mae and Freddie Mac Proves Resiliency * Lodging Industry Feels Pressure as People Cuts Travel Spending * Proskauer Rose-Los Angeles Adds Andrew M. Katzenstein as Partner * Christopher Marcus of Weil Gotshal Joins Kirkland & Ellis * BOND PRICING: For the Week of July 21 to July 25, 2008 ********* 51 MILL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: 51 Mill Strett, LLC 51-1 Mill Street Wolfeboro, NH 03894 Bankruptcy Case No.: 08-12054 Type of Business: The Debtor owns and operates a restaurant. Chapter 11 Petition Date: July 24, 2008 Court: District of New Hampshire (Manchester) Judge: Mark W. Vaughn Debtor's Counsel: Mary Notaris, Esq. Email: planctot@notarislaw.com 45 Stiles Road, Suite 104 Salem, NH 03079 Tel: (603) 898-6954 http://notarislaw.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/nhb08-12054.pdf ABITIBIBOWATER INC: Inks Consulting Agreement with T. Thorsteinson ------------------------------------------------------------------ On July 14, 2008, in connection with the retirement of Thor Thorsteinson, the company's Senior Vice President, International Business Division, effective Aug. 1, 2008, AbitibiBowater Inc. and Mr. Thorsteinson entered into a consulting agreement. Pursuant to the consulting agreement, Mr. Thorsteinson will provide consulting services to the company until Dec. 31, 2008, primarily in connection with the company's international business. Total compensation under the consulting agreement will not exceed $380,000. In addition, Mr. Thorsteinson has agreed to extend the period of his non-compete obligations under his severance agreement until July 31, 2011, and in consideration of such agreement the company will pay to Mr. Thorsteinson $400,000. In connection with his retirement, and the execution of the consulting agreement, Mr. Thorsteinson will execute a customary waiver and release agreement in favor of the company. Following his retirement, Mr. Thorsteinson will be entitled to severance benefits as set out in the Severance Compensation Agreement, dated April 1, 2002, between Abitibi-Consolidated Inc. and Mr. Thorsteinson. Mr. Thorsteinson's executive responsibilities were reallocated to the remaining executive officers. About AbitibiBowater Inc. Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/ -- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. AbitibiBowater is also among the world's largest recyclers of newspapers and magazines. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange. As reported in the Troubled Company Reporter on May 20, 2008, the company's consolidated balance sheet at March 31, 2008, showed $10.3 billion in total assets, $8.7 billion in total liabilities, and $1.6 billion in total stockholders' equity. * * * As reported in the Troubled Company Reporter on April 16, 2008, Standard & Poor's Ratings Services assigned recovery ratings to the senior unsecured debt issues of AbitibiBowater Inc., Abitibi- Consolidated Inc., and Bowater Inc. At the same time, S&P lowered the issue-level rating on these debts to 'CCC+' from 'B-'. ADVANCED MICRO: Dirk Mayer Succeeds Hector Ruiz as CEO ------------------------------------------------------ Advanced Micro Devices Inc. disclosed last week that its board of directors elected president and chief operating officer Dirk Meyer as the company's chief executive officer. Meyer succeeds Hector Ruiz, who will become executive chairman of the company and chair of the board of directors. "Dirk's election to chief executive officer is the final phase of a two-year succession plan developed and implemented jointly by AMD's board of directors and executive team," said Robert Palmer, lead independent director. "Under Hector's strong leadership, AMD drove the industry adoption of pervasive 64-bit and multicore computing, became a trusted enterprise-class partner to leading technology suppliers and significantly expanded its global footprint in high-growth markets like China. "Dirk's extensive experience as a business leader and his notable engineering accomplishments before and during his 12 years at AMD make him ideally suited to build upon the foundation Hector created and lead AMD." "AMD has fundamentally altered the industry landscape, leading the innovation agenda while delivering greater choice and better experiences for our customers and users," said Ruiz, executive chairman. "Dirk is a gifted leader who possesses the right skills and experience to continue driving AMD and the industry forward in new, compelling directions. I am placing the company in excellent hands." Mr. Meyer, 46, joined the company in 1995. In 2006, Mr. Meyer was appointed president and chief operating officer, and in 2007, he was elected to the company's board of directors. Mr. Ruiz, 62, joined the company as president and chief operating officer in January 2000 and became the company's chief executive officer on April 25, 2002. He has served on the company's board of directors since 2000 and was appointed chairman of the board of directors in 2004. About Advanced Micro Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. At June 28, 2008, the company's consolidated balance sheet showed $9.8 billion in total assets, $8.1 billion in total liabilities, $189 million in minority interest in consolidated subsidiaries, and $1.5 billion in total stockholders' equity. * * * As reported in the Troubled Company Reporter on Jan. 28, 2008, Fitch downgraded these ratings on Advanced Micro Devices Inc., including its Issuer Default Rating to 'B-' from 'B'; and its Senior unsecured debt to 'CCC'/RR6 from 'CCC+/RR6'. The Rating Outlook remains Negative. AERCO LIMITED: Fitch Affirms Ratings on Seven Note Classes ---------------------------------------------------------- Fitch Ratings has affirmed AerCo Limited as: -- Class A-3 notes affirmed at 'BBB-'; -- Class A-4 notes affirmed at 'BBB'; -- Class B-1 notes remain at 'CC/DR4'; -- Class B-2 notes remain at 'CC/DR4'; -- Class C-1 notes remain at 'C/DR6'; -- Class C-2 notes remain at 'C/DR6'; -- Class D-2 notes remain at 'C/DR6'. Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft given the aviation market volatility and significantly elevated fuel prices. AerCo Limited was affirmed as it was found to have credit support consistent with its current ratings. ALEXANDER CITY SPECIAL: S&P Cuts Revenue Bonds Rating to BB+ ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on Alexander City Special Care Facilities Financing Authority, Alabama's series 2006A-B hospital revenue bonds, issued for Russell Hospital Corp. to 'BB+' from 'BBB-'. The outlook is stable. The downgrade reflects continued operational stress, highlighted by a sizeable 11% decline in inpatient admissions in fiscal 2007, contributing, in part, to an operating deficit that totaled $2.8 million. Furthermore, interim results through the five-month period ended May 2008 indicate continued pressure, with an operating deficit totaling nearly $1 million. Russell appeared to have turned a corner in fiscal 2006, with a slight operating gain after a history of negative operations. However, the turnaround was short-lived, and the inability to sustain the improvement or stabilize operations, as management had indicated, is a concern. Future rating action will hinge on management's ability to identify the operational issues and take corrective action to improve Russell's operating results and cash flow. Russell's liquidity is relatively light, although adequate for the lower rating level, with 79 days' cash on hand and thin cash-to- total debt ratio of just 31%. Factors supporting the current rating include Russell's position as the leading provider within its primary service area and designation as a rural referral center; positive reimbursement effect due to the recent wage index reclassification to the more favorable Birmingham metropolitan statistical area; and a low average age of plant at 9.8 years. "The stable rating outlook is based on our expectation that Russell's financial performance, while still negative in fiscal 2008, will be partly offset by several one-time revenue gains," said Standard & Poor's credit analyst Stephen Infranco. "Furthermore, the stabilization and slight improvement in liquidity provides some operating stability at the current rating level," added Mr. Infranco. Despite some outmigration, Russell continues to be the dominant provider within its service area and management is taking action to improve business volume and operating performance over the next several years. However, if Russell continues to generate an operating loss greater than expected, volumes continue to decline, or liquidity erodes, S&P could revise the outlook to negative or lower the rating further. ANTHONY TRIGONA: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtors: Anthony S. Trigona Kathleen D. Trigona 123 Fayette Street Johnstown, PA 15905 Bankruptcy Case No.: 08-70806 Chapter 11 Petition Date: July 24, 2008 Court: Western District of Pennsylvania (Johnstown) Debtors' Counsel: James R. Walsh, Esq. Email: jwalsh@spencecuster.com Spence Custer Saylor Wolfe & Rose 400 U.S. Bank Building P.O. Box 280 Johnstown, PA 15907 Tel: (814) 536-0735 Fax: (814) 539-1423 http://spencecuster.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million A list of the Debtors' largest unsecured creditors is available for free at: http://bankrupt.com/misc/pawb08-70806.pdf AOT BEDDING: S&P Lowers Corporate Credit Rating to B from B+ ------------------------------------------------------------ Standard & Poor's Rating Services lowered its corporate credit rating on Hoffmann Estates, Illinois-based AOT Bedding Holdings Corp. to 'B' from 'B+'. At the same time, S&P lowered all of its existing issue-level ratings on the company by one notch. The outlook is stable. As of March 31, 2008, the company had about $631 million of total debt, excluding operating lease obligations. The downgrade is based on weaker-than-anticipated credit measures that are below S&P's previous expectations, as housing market weakness and a difficult consumer spending environment has negatively affected the company's bedding business. The company remains very highly leveraged following the issuance of debt to finance the redemption of preferred stock from its shareholders in February 2007. S&P believe the company will be challenged to improve credit measures over the near term, reflecting its expectation for continued softness in the U.S. housing market, a weak retail environment, and rising raw material costs. The speculative-grade ratings on AOT reflect its narrow business focus, aggressive financial policy, and highly leveraged financial profile. Somewhat mitigating these factors are the company's well-recognized brands, solid market position, and the mattress industry's relatively stable demand and significant barriers to entry. The outlook on AOT is stable, reflecting AOT's adequate liquidity position, strong cash balance, and a lack of covenant issues. S&P expect the company to improve operating performance and reduce debt leverage over time, yet it may be difficult for AOT to materially strengthen credit measures over the next six to 12 months, given the current economic environment. "We would consider a negative outlook if leverage continues to rise and/or the company pursues a more aggressive financial policy," noted Standard & Poor's credit analyst Rick Joy. S&P estimate that prolonged weakness in the residential housing market, resulting in a high single-digit percentage decline in EBITDA, would cause leverage to rise well over 7x, which could result in an outlook revision to negative. The current ratings and outlook do not incorporate any sizable debt-financed dividends or acquisitions. Given the challenging retail and residential housing environment in the U.S., it is unlikely S&P would consider a positive outlook over the next year," he continued. ARCADIA RESOURCES: Amends 2008 Executive Compensation Plan ---------------------------------------------------------- On July 14, 2008, the Board of Directors of Arcadia Resources Inc. approved an amendment to the company's 2008 Executive Performance Based Compensation Plan, removing the requirement that stockholder approval be obtained in order for the Plan to be effective. The Amendment also provides that when determined by the Board to be necessary and appropriate under Section 162(m) of the Internal Revenue Code, as amended, the Plan shall be submitted for the approval of the company's shareholders at the next following annual meeting of shareholders. In the event that the Plan is not so approved by shareholders after having been submitted for approval after recommendation by the Board, the Plan shall cease to be effective and will terminate with respect to all subsequent Plan years. On May 1, 2008, the Board of Directors of Arcadia Resources Inc. and the Compensation Committee of the Board approved the Arcadia Resources Inc. 2008 Executive Performance Based Compensation Plan, subject to stockholder approval. A full-text copy of the company's 2008 Executive Performance Based Compensation Plan, dated as of May 1, 2008, is available for free at http://researcharchives.com/t/s?2ffc A full-text copy of Amendment No. One to the company's 2008 Executive Performance Based Compensation Plan, dated as of July 14, 2008, is available for free at: http://researcharchives.com/t/s?2ffd About Arcadia Resources Headquartered in Indianapolis, Arcadia Resources Inc. (AMEX: KAD) -- http://www.arcadiaresourcesinc.com/-- is a healthcare company that provides healthcare, medical equipment, prescription drugs, and medical, professional and diversified staffing. At March 31, 2008, the company's consolidated balance sheet showed $99.4 million in total assets, $49.6 million in total liabilities, and $49.8 million in total stockholders' equity. * * * In BDO Seidman, LLP's audit report for the company's fiscal 2007 year-end financial statements, the auditing firm expressed substantial doubt about the company's ability to continue as a going concern, pointing to the company's recurring losses. Arcadia has reported net losses in the past four fiscal periods, including a net loss of $23.4 million for the year March 31, 2008. In the company's audit report for the fiscal 2008 year-end financial statements, however, BDO Seidman, LLP, issued an unqualified audit opinion, removing the going concern issue included in last year's audit. The foregoing notwithstanding, and in view of the fact that the company continues to incur losses, the Troubled Company Reporter will continue to cover Arcadia Resources Inc. until such time that the company has shown verifiable proof that they have reversed this trend. ASARCO LLC: Alta Mining, et al. Can Hire Baker Botts as Counsel --------------------------------------------------------------- Alta Mining and Development Company and certain ASARCO LLC affiliates obtained 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. In April 2008, six of ASARCO LLC's affiliates -- Alta Mining, 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. As the Subsidiary Debtors' counsel, Baker Botts is expected to: (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, said 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, Esq., a partner at Baker Botts L.L.P., in Dallas, Texas, assured 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. 77; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Doe Run Objects to Anthony Laizure as Fund Monitor -------------------------------------------------------------- Doe Run Resources Corporation asks the U.S. Bankruptcy Court for the Southern District of Texas to deny the toxic tort claimants' request to appoint Anthony Laizure as the special fund master in ASARCO LLC and its debtor-affiliates' Chapter 11 cases. The special fund master is expected to monitor and supervise the allocation and distribution of settlement of funds to minor toxic tort claimants. Bonnie N. Hackler, Esq., at Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., in Tulsa, Oklahoma, tells the Court that Rule 9031 of the Federal Rules of Bankruptcy Procedure precludes the appointment of masters in cases and proceedings under the Bankruptcy Code. Rule 9031 provides that "it is the purpose of Rule 9031 that all matters that are to be tried in bankruptcy cases are to be tried by the bankruptcy judge or in appropriate cases, by the district judge." Doe Run contends that Tony Laizure is disqualified from serving as Special Master because he is not a neutral party to determine the amount of settlement monies allotted to the Settling Parties because of his role as counsel for the plaintiffs in the litigation relating to the Tar Creek toxic claims. Furthermore, Doe Run asserts that the Claimants' request to pay Tony Laizure from the settlement proceeds, if approved, is against the principle of disinterestedness. Blue Tee Corp. and Gold Fields Mining, LLC, join in Doe Run's objection. ASARCO LLC, for its part, tells Judge Schmidt that it takes no position on whether the Court should grant the Appointment Request. However, if the Court does grant the Request, ASARCO asks that the Court enter an order that preserves its rights under the toxic tort claims settlement agreements. ASARCO also asks that the Court's order reflect that in no event will the special master's fees and expenses be paid from ASARCO's bankruptcy estate. 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. 77; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: NM Environment Dept. Opposes El Paso Smelter Reopening ------------------------------------------------------------------ The New Mexico Environment Department opposes the issuance of exemptions to ASARCO LLC from certain air permitting requirements in the company's efforts to re-open its copper smelter in El Paso, Texas, the Associated Press reported. According to the AP, New Mexico Environment Secretary Ron Curry said ASARCO should be treated as a new company applying for an initial air quality permit rather than operating under an old permit. "The reopening of [the El Paso] facility would create adverse impacts for New Mexicans and those in the surrounding region," AP said quoting Mr. Curry as saying. The El Paso Smelter is less than a mile from New Mexico's border, the AP related. "A recent progress report from Asarco to the Texas Commission on Environmental Quality indicates the company is a long way from being able to restart the facility because equipment at the facility is outdated and dilapidated," AP further quoted Mr. Curry as saying. In February 2008, the Texas Commission on Environmental Quality granted ASARCO a five-year air quality permit that would allow the company to restart the El Paso Smelter. ASARCO closed the El Paso smelter in 1999, and filed the air permit request in 2001. ASARCO's request for a new air permit was met with several oppositions from various entities and government agencies, including the city of El Paso and residents of El Paso and neighboring communities. 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. 77; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASG CONSOLIDATED: S&P Holds B+ Rating After $55MM Offering Add-On ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the rating on ASG Consolidated LLC's senior unsecured notes, following the announcement that the company increased the size of the issue to $251 million, from $196 million through a $55 million add-on offering. The notes are rated 'B+'. S&P also revised the recovery rating on the notes to '3', indicating the expectation for meaningful (50%-70%) recovery in the event of a payment default, from '4'. At the same time, S&P revised the outlook on ASGC, and its wholly owned operating subsidiary American Seafoods Group LLC, to negative from stable, while affirming ASGC's other existing ratings, including its 'B+' corporate credit rating. The action affects about $675 million of pro forma debt. The revised outlook is based on the company's more aggressive financial policy as a result of its issuance of an additional $55 million of senior discount notes at ASGC, as the company distributed these proceeds to shareholders. As a result, leverage increases further and is weak for the rating. The ratings on ASGC and its wholly owned operating subsidiary, American Seafoods Group LLC, and the co-issuer of the company's senior discount notes, ASG Finance Inc., reflect the company's high leverage, aggressive financial policy, and participation in the competitive, commodity-oriented commercial fishing industry. For analytical purposes, Standard & Poor's views ASGC, ASG, and ASGF as one economic entity, and they are accordingly analyzed on a consolidated basis. The outlook is negative. Pro forma debt leverage of about 6x is weak for the rating. "While the company continues to demonstrate stable operating performance, we believe it will be more challenged to materially reduce debt leverage in the near term, particularly as its discount notes become cash pay in May 2009," said Standard & Poor's credit analyst Jerry Phelan. As a result, S&P could lower the ratings in the near term if the company does not reduce debt leverage approaching the low-5x area and/or cannot maintain sufficient cushion on its financial covenants. "However, if the company can improve leverage closer to 5x and maintain a stable operating performance and liquidity, we could revise the outlook to stable," he continued. An outlook revision to positive is unlikely, given ASG's existing high leverage. ATA AIRLINES: Court Extends Lease Decision Deadline to Aug. 15 -------------------------------------------------------------- In a bridge order, the U.S. Bankruptcy Court for the Southern District of Indiana gave ATA Airlines Inc., until Aug. 15, 2008, to decide on whether to reject or assume its leases for nonresidential real properties. The Debtor earlier requested the Court to issue an order extending the period during which it may assume or reject non-residential real property lease for 90 days, pursuant to Section 365(d)(4)(B) of the Bankruptcy Code. Prior to the Petition Date, ATA Airlines Inc. operated a diversified international passenger airline that operated in two principal business segments: (a) a low cost carrier operation that provided scheduled passenger service that leveraged a code share agreement with Southwest Airlines; and (b) a charter operation focusing primarily on providing charter service to the United States government/military. The Debtor has vacated its real property leases at various airports around the world and shipped, to the extent economically practicable, the personal property located at those facilities to warehouses located in three centralized locations: (1) Dallas, (2) Chicago and (3) Indianapolis. In addition to these three warehouses, the Debtor currently occupies three office buildings at is headquarters in Indianapolis. The Debtor currently has auctions scheduled at its Chicago warehouse and at two of its three buildings at its Indianapolis headquarters to be held on July 22 and 24, 2008. At the completion of these auctions, the Debtor intends to vacate its Chicago warehouse and two of its three Indianapolis office buildings. The Debtor also currently has scheduled, subject to Court approval, auctions at its Indianapolis and Dallas warehouses to be held during the first and second week of September 2008. The Debtor intends to vacate its Indianapolis and Dallas warehouses by Sept. 30, 2008. Section 365(d)(4)(A) of the Bankruptcy Code provides that a debtor-in-possession has 120 days after the date of the order for relief within which to assume or reject nonresidential leases of real property. If the debtor in possession fails to assume a nonresidential lease of real property within the 120-day period, the lease is deemed rejected and the debtor-in-possession must immediately surrender possession of the leased premises. However, Section 365(d)(4)(B), provides that, the court, for cause shown, may grant a 90-day extension of the 120-day period. "Continued possession of the leased facilities that the Debtor currently occupies is necessary to enable the Debtor to continue its orderly liquidation, conduct its wind-down operations and hold auctions at these locations," Terry E. Hall, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, asserts. The Debtor is current on all of its postpetition rent obligations at each of these leased facilities, Ms. Hall relates. * * * The Court will convene a hearing on Aug. 13, 2008, to consider final approval of ATA Airlines' request for a total extension of 90 days. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. (ATA Airlines Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ATA AIRLINES: Plan Filing Period Extended to Feb. 26, 2009 -------------------------------------------------------------- The U.S. Bankrupty Court for the Southern District of Indiana gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, to solicit acceptances of that plan. The extension gives ATA Airlines more time to settle its labor dispute with its employees prior to proposing a plan. The airlines said the resolution of the lawsuits filed against it would determine the status and amount of the claims essential for the plan's formulation. ATA Airlines faces five lawsuits for alleged violations of the Worker Adjustment and Restraining Notification Act. The lawsuits were filed by the Transport Workers Union of America, the Association of Flight Attendants-CWA, the Air Line Pilots Association International, the International Association of Machinists & Aerospace Workers AFL-CIO, and former employee Kevin Batman. The WARN Act lawsuits are set for trial in early February 2009. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. (ATA Airlines Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). AVISTAR COMMS: June 30 Balance Sheet Upside-Down by $14.8 Million ----------------------------------------------------------------- Avistar Communications Corporation disclosed last week its financial results for the three month period ended June 30, 2008. At June 30, 2008, the company's consolidated balance sheet showed $10.2 million in total assets and $25.0 million in total liabilities, resulting in a $14.8 million stockholders' deficit. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $9.0 million in total current assets available to pay $16.0 million in total current liabilities. The company reported a net loss of $1.6 million for the second quarter ended June 30, 2008, as compared to net income of $388,000 in the same period last year. Total revenue was $1.8 million, as compared to total revenue of $5.9 million for the quarter ended June 30, 2007. The company reported a loss from operations of $1.5 million for the second quarter of 2008, compared to income from operations of $338,000 in the corresponding period last year. Income from settlement and licensing activity, which management sees as a key component of the company's "top line" performance, was $1.1 million in both quarters of 2008 and 2007. The cash and cash equivalent balance at June 30, 2008, was $5.7 million. "This is the third quarter of sequential improvement in total costs and expenses and reflects the focus of management on improving operational productivities," said Bob Habig, Avistar's chief financial officer. "The second quarter also posted an adjusted EBITDA of a $1.2 million loss, an improvement of 66% over the first quarter of 2008, and a positive trend from the second half of last year." "Progress in the Avistar turnaround was dramatic during the second quarter of 2008, with a significant reduction in our costs translating into huge increases in staff efficiency and financial productivity," said Simon Moss, Avistar's chief executive officer. "At the same time, we increased our revenue over the first quarter by more than 50%, and now have in place an efficient organization that is ready to leverage top-line growth. As further evidence of this capacity, we nearly doubled our product bookings in the second quarter as compared to the first quarter of 2008, posting the third best result in the last five years." Mr. Moss continued, "A year-to-date comparison with 2007 results is the best demonstration of the challenge confronted by Avistar, and what I directed the new management team to address as its highest priority during the first part of 2008. As historical context, Avistar was building a cost base that counted on a continuation of the patent licensing deals that we were fortunate enough to accomplish in both the first and second quarter of 2007. To establish a cost structure more in line with a predictable revenue stream and to respond to Microsoft's challenge to our entire U.S. patent portfolio, we went through a painful set of cost reductions during the first quarter to moderate our cash burn. As we've previously communicated, we expect that improvements demonstrated in the second quarter will translate into a full year cost reduction of approximately 40% compared to 2007." "Now we enter a new phase of our turn-around strategy. During the third quarter, we expect to see traction from the diversification of our Go-to-Market strategy through partnership agreements, technology licensing, continued sales momentum with a new, market- leading software-based product portfolio, and the establishment of an indirect channel of distributors and resellers – something that the company had not pursued in the past. Over the last several months, we have signed 14 channel partners, and although we recognize that building a distributor and reseller channel does not produce instantaneous revenue results, we fully expect that this distribution approach will provide for highly leverage-able proceeds by year-end." Mr. Moss continued, "We believe the last six months demonstrates the caliber of our team, and our focus on addressing the challenges we face. We are now focused on top-line growth, anticipating significant leverage from the structural adjustments that we have accomplished." About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. BICENT POWER: Operational Issues Cue S&P to Put On Negative Watch ----------------------------------------------------------------- On July 24, 2008, Standard & Poor's Ratings Services placed its 'BB-' issue-level rating on Bicent Power LLC's $480 million senior secured credit facility and the 'B-' issue-level rating on the $130 million senior secured second lien term loan on CreditWatch with negative implications. The first-lien term loan has a recovery rating of '2', indicating the expectation for substantial (70% to 90%) recovery of principal if a payment default occurs, and the second-lien term loan has a recovery rating of '6', indicating the expectation for negligible (0% to 10%) recovery. "The CreditWatch listing is largely a reflection of the operational issues at the Hardin facility, which is the source for more than 50% of the contracted cash flows used for servicing debt," said Standard & Poor's credit analyst Terrence Marshall. "Equipment failures led to forced outages in December of 2007 and during the first quarter of 2008. The project has been drawing on its liquidity facilities to maintain operations and service debt." Temporary repairs made with interim replacement parts have allowed the plant to run, but with a sustained reduction in output. Any delays in bringing the plant back to full capacity or further unscheduled outages at the plant may lead to a lowered rating. A downgrade could also result from deteriorating financial results occurring during the rest of 2008. Bicent Power is a special-purpose, bankruptcy-remote operating company formed in 2007 to acquire independent power producer Centennial Power Inc., including its 536 megawatt coal and gas generation portfolio, and its power plant operations and construction firm, Colorado Energy Management LLC. Bicent Power is 100% indirectly owned by power industry investment firm Beowulf Energy LLC (16.7%) and Natural Gas Partners VIII L.P. (83.3% of shares), which is one of eight private equity funds of oil and gas investment firm Natural Gas Partners LLC that together represent $2.9 billion in commitments. The members own their interests in Bicent Power through a holding company, Bicent RF LLC, and its wholly owned subsidiary, intermediate holding company Bicent Funding LLC. Bicent Power meets Standard & Poor's ring- fencing criteria for special-purpose entities, including the provision of an independent director and a nonconsolidation opinion. BIRCH MOUNTAIN: Board Says Sale is Necessary to Regain Liquidity ---------------------------------------------------------------- Birch Mountain Resources Ltd. disclosed that the special committee of independent directors and the board have determined that it is necessary to pursue an immediate sale of the company to unlock maximum value for its shareholders. The company related that the lack of liquidity has compressed Birch Mountain's share price to a level significantly below its underlying value. The company reported that it has received notice of an event of default in connection with the financial covenants in the loan agreement with its senior secured lender. As reported on the Troubled Company Reporter on July 7, 2008, Birch Mountain has not made the scheduled June 30, 2008, interest payment to the holders of the Convertible Unsecured Subordinate Debentures. As a consequence of the company being in breach of a financial covenant under its senior secured credit facility, the lender, Tricap Partners Ltd., has exercised its right under the loan agreement to direct Computershare Trust Company not to make the scheduled interest payment until further notice from the lender. Birch Mountain is working to rectify the breach and secure the necessary additional liquidity to make the interest payment. The company stated that discussions are ongoing with the senior secured lender through the special committee and its financial advisor RBC Capital Markets. The company stated that an immediate and focused sale process will maximize value. In the event this immediate sales process does not achieve an acceptable price, the company intends to work with its stakeholders to recapitalize the balance sheet to improve liquidity and permit delivery of the business plan. In other news, Birch Mountain has signed an agreement with the East Athabasca Highway Proponents led by Suncor Energy, for the acquisition, construction and operation of the South Haul Road. The sale price was $4.8 million plus Birch Mountain will sell aggregates from inventory for the construction of the 9 kilometres to be built and will have unlimited use of the SHR into the future. "The South Haul Road is an integral link to the proposed East Athabasca Highway and will facilitate building this new highway that will extend east to several oil sands projects," explained Joel Jarding, president and chief operating officer. "This agreement is pivotal for the company and has both short and long term benefits. These include the cash payment and the opportunity to sell aggregates for the construction of more than 50 kilometres of new roads. In addition, the direct road access from our quarry to major oil sands projects in the area will provide long term opportunities to supply aggregate and reagent products into the future." "We have identified a significant number of business opportunities over the next 18 months and we are focused on converting these opportunities into sales," Mr. Jarding added. "Importantly, Birch Mountain is now supplying, on a trial basis, the bulk of the regional demand for reagent limestone used in air emissions purification. Within the quarry, our operations personnel remain focused on containing costs and increasing productivity." About Birch Mountain Headquartered in Calgary, Canada, Birch Mountain Resources Ltd. (TSX and AMEX: BMD) -- http://www.birchmountain.com/-- operates the Muskeg Valley Quarry, an early production stage limestone quarry that produces limestone aggregate products for sale to customers in the Athabasca Oil Sands region of northeastern Alberta. The company is engaged in the regulatory approval process for the Hammerstone Project which will expand the Muskeg Valley Quarry and add an integrated limestone processing complex to provide manufactured limestone-based products such as quicklime, as well as related environmental services such as spent lime recalcining. Going Concern Doubt Birch Mountain Resources Ltd. disclosed in its report on Form 6-K which was filed with the U.S. Securities and Exchange Commission on May 20, 2008, that the company currently has insufficient revenue to meet its yearly operating and capital requirements. The company has incurred operating losses since its inception in 1995, and as of March 31, 2008, has an accumulated deficit of C$48.2 million. Losses are from costs incurred in the early operation and development of the Muskeg Valley Quarry and the Hammerstone Project, exploration of mineral opportunities and mineral technology research. Future operating losses may occur as a result of the continued operation of the Muskeg Valley Quarry and development of the Hammerstone Project. The company has a working capital balance at March 31, 2008, of C$2.1 million, a decrease of approximately C$5.5 million from Dec. 31, 2007. The company has formally engaged RBC Capital Markets to assist in the evaluation of strategic alternatives, which includes discussing debt and equity strategies for its immediate and medium term capital needs. To the extent the company raises additional capital by issuing equity or convertible debt securities, ownership dilution to shareholders will result. The company believes the foregoing factors raise substantial doubt about the company's ability to continue as a going concern. BLOUNT INT'L: Inks Amended Employment Agreement with R. Irving III ------------------------------------------------------------------ On July 14, 2008, Blount International Inc. approved an Amended and Restated Employment Agreement with Richard H. Irving, III as Senior Vice President, General Counsel and Secretary of Blount. The terms of the Agreement provide that Irving will be paid a base salary of $348,000, be eligible to participate in Blount's incentive plans with a target bonus of 50% of base salary and a maximum award for exceeding performance goals of 100% of base salary, and participate in Blount's retirement and benefit plans, arrangements and perquisites generally available to executive officers. The Agreement is for a term commencing on July 14, 2008, and ending on Aug. 7, 2010. The Agreement has a clause that prohibits the executive, generally for up to one year following his termination of employment, from competing directly or indirectly with Blount and from soliciting customers or employees of Blount. About Blount International Blount International Inc. (NYSE: BLT) -- http://www.blount.com/-- is an international company operating one principal business segment, the Outdoor Products segment. Blount sells its products in more than 100 countries around the world. The Outdoor Products segment manufactures and markets cutting chain, guide bars, sprockets and accessories for chainsaw use, concrete-cutting equipment and accessories and lawnmower blades. This segment also markets branded parts and accessories for the lawn and garden equipment market. The segment's products are sold to original equipment manufacturers for use on new chainsaws and yard care equipment, and to the retail replacement market through distributors, dealers and mass merchants. * * * At March 31, 2008, the company's consolidated balance sheet showed $407.5 million in total assets and $451.3 million in total liabilities, resulting in a $43.8 million stockholders' deficit. BROADLANE INC: S&P Assigns 'B+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B+' corporate credit rating to Dallas, Texas-based supply chain and workforce management services provider Broadlane Inc. The rating outlook is stable. At the same time, Standard & Poor's assigned its issue-level and recovery ratings to the company's proposed $150 million senior secured first-lien credit facility, consisting of a $15 million revolver due in 2013 and a $135 million term loan due in 2013. The loan was rated 'BB' with a recovery rating of '1', indicating the expectation of very high (90%-100%) recovery in the event of a payment default. The senior secured term loan, along with unsecured mezzanine notes (unrated) and management and sponsor equity, is being used to finance the purchase of the company by TowerBrook Capital Partners L.P. The $15 million revolving credit facility will provide additional liquidity, as necessary. "The 'B+' rating reflects Broadlane's uncertain level of success operating as a newly independent entity in the competitive group purchasing organization industry, the concentration within its relatively limited revenue base, and its high financial leverage," said Standard & Poor's credit analyst Michael Berrian. "These risks are partially offset by the company's unique service offering, the recurring nature of its revenues, and its strong cash flow generation." Pro forma for the transaction, Broadlane will be highly leveraged, with debt to EBITDA of approximately 4.7x on a lease-adjusted basis. Leverage is considerably higher when the sponsor equity, which S&P views as having the potential to be recapitalized into debt, is treated as debt. S&P expects Broadlane's internally generated cash flows to be sufficient to support its debt service. C-BASS CBO: Collateral Deterioration Prompts Fitch to Junk Ratings ------------------------------------------------------------------ Fitch downgraded and removes from Rating Watch Negative four classes of notes issued by C-BASS CBO XVII LTD. These rating actions are effective immediately: -- $339,733,690 class A to 'CCC' from 'BBB',; -- $26,500,000 class B to 'CC' from 'BBB-'; -- $29,000,000 class C to 'C' from 'BB'; -- $12,180,000 class D to 'C' from 'B+''. C-BASS XVII is a structured finance collateralized debt obligation that closed on Oct. 17, 2006 and is managed by C-BASS Investment Management, LLC. As of the trustee report dated June 27, 2008, approximately 72.8% of the portfolio was comprised of 2005 and 2006 vintage U.S. subprime residential mortgage-backed securities, 13.4% consists of 2005-2007 vintage U.S. Alternative-A RMBS, while the remaining portfolio consists of asset backed securities and other structured finance assets (8.8% and 5%, respectively). Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically with regard to subprime RMBS and Alt-A RMBS. Since the review in November 2007, approximately 62% of the portfolio has been downgraded to ratings of 'CCC+' or lower. The negative credit migration experienced since closing has resulted in the Fitch Weighted Average Rating Factor deteriorating to 36.76 as of the June 27, 2008 trustee report, breaching its covenant of 5.00. The credit deterioration that has occurred to date is such that almost all of the credit support to all of the rated classes of notes is comprised of assets rated 'CCC+' or lower. Due to the current state of the portfolio, it is expected that the class A notes may receive some future principal distributions, while no further principal distributions are expected for all of the other rated classes. The class A and B notes are expected to continue to receive interest given that they are timely classes, while the class C and D notes are currently not receiving interest or principal payments due to coverage test failures. The ratings of the class A and B notes address the timely receipt of scheduled interest payments and the ultimate receipt of principal as per the transaction's governing documents. The ratings on the class C and D notes address the ultimate receipt of interest payments and ultimate receipt of principal as per the transaction's governing documents. CHARMING SHOPPES: Alan Rosska to Receive $100,000 Monthly Salary ---------------------------------------------------------------- As reported in the Troubled Company Reporter on July 10, 2008, Charming Shoppes Inc. announced the resignation of Dorrit J. Bern as president, chief executive officer, and a director of the company. Alan Rosskamm, the company's chairman of the Board, will serve as interim chief executive officer while a search is conducted for Ms. Bern's successor. On July 16, 2008, the company's Compensation Committee approved a monthly salary of $100,000 to be paid to Mr. Rosskamm for his services as interim chief executive officer until a permanent chief executive officer is appointed. In addition, the company's Compensation Committee approved a grant of 41,152 stock appreciation rights to Mr. Rosskamm. Each stock appreciation right represents the right to receive, at exercise, a number of shares of the company's common stock with a fair market value at the date of exercise equal to the appreciation in value of shares over the base amount. The base amount is $4.60 per share, which is the fair market value of a share on July 16, 2008, the grant date. About Charming Shoppes Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc. (Nasdaq: CHRS) -- http://www.charmingshoppes.com/-- is a multi- brand, multi-channel specialty apparel retailer specializing in women's plus-size apparel. At May 3, 2008, the company operated 2,407 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). At May 3, 2008, the company's consolidated balance sheet showed $1.6 billion in total assets, $925.3 million in total liabilities, and $677.3 million in total stockholders' equity. * * * 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, primarily due to slumping sales in the company's Retail Stores segment. Net sales for the company's Retail Stores segment were $614.9 million as compared to $686.7 million during the first quarter ended May 5, 2007. During the quarter, the company closed 23 of the 150 underperforming stores identified for closure during this fiscal year. For the fourth quarter ended Feb. 2, 2008, the company reported a net loss of $127.6 million, which included non-cash asset impairment charges and non-cash write downs, primarily of store assets, in the amount of $105.7 million after-tax. Net sales for the company's Retail Stores segment were $634.6 million during the thirteen weeks ended Feb. 2, 2008, a decrease of 12% compared to $723.9 million during the fourteen weeks ended Feb. 3, 2007. The Wall Street Journal reported on July 10, 2008, that in May, Charming Shoppes and shareholders led by hedge fund Crescendo Partners II LP ended a bitter proxy fight, striking a deal that resulted in both sides getting two board nominees elected. The investor group had been calling for the sale of noncore assets, cost cuts, merchandise improvements and slower store expansion. It also wanted a share buyback and had been questioning the results of Ms. Bern's 13-year reign. CLARIENT INC: Stephen Zarrilli Replaces Brian Sisko in Board ------------------------------------------------------------ Brian J. Sisko has resigned from the board of directors of Clarient Inc., effective July 14, 2008. The company's board has appointed Stephen T. Zarrilli, a designee of Safeguard Scientifics Inc., the company's majority shareholder, to fill the vacancy on the board created by Mr. Sisko's resignation. Mr. Zarrilli serves as senior vice president and chief financial officer of Safeguard. Mr. Zarrilli, age 47, is also the non-executive chairman of the Penn Valley Group, a middle-market management advisory and private equity firm. Mr. Zarrilli is currently a director and chairman of the Audit Committee of NutriSystem Inc. In addition, on July 14, 2008, the compensation committee of the company's board of directors approved an increase in the annual base salary of Ronald Andrews, the company's chief executive officer, from $315,000 to $400,000 effective July 15, 2008. In addition, the Compensation Committee approved a retroactive increase in Mr. Andrews' salary of $4,000 per month for the period from April 1, 2008, through July 15, 2008. Mr. Andrews' annual target bonus will continue to be 75% of his base salary (with the potential to earn up to two times this amount based upon achievement of company and personal objectives). For 2008, Mr. Andrews' target bonus will be based off of an assumed base salary of $363,000. The Compensation Committee also approved an amendment to the vesting provisions of Mr. Andrews' existing stock option grants to provide that any unvested stock options held by Mr. Andrews will accelerate upon a change of control of the Company. About Clarient Inc. Based in Aliso Viejo, Calif., Clarient, Inc. (Nasdaq: CLRT) -- http://www.clarientinc.com/-- is an advanced oncology diagnostics services company. The company's principal customers include pathologists, oncologists, hospitals and biopharmaceutical companies. Clarient Inc.'s consolidated balance sheet at March 31, 2008, showed $30,282,000 in total assets and $32,832,000 in total liabilities, resulting in a $2,550,000 stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on April 10, 2008, KPMG LLP, in Costa Mesa, Calif., expressed substantial doubt about Clarient 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 recurring losses, negative cash flows from operations, and working capital and net capital deficiencies. In addition, KPMG said it is not probable that the company can remain in compliance with the restrictive monthly financial covenant in its bank credit facility. In order to comply with the covenants in the current debt agreement, the company must achieve operating results at levels not historically achieved by the company. COLUMBIA COUNTY HOSPITAL: S&P Cuts $14.5MM 1999 Bonds Rating to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating to 'B-' from 'B' on Columbia County Hospital Authority, Pennsylvania, $14.5 million series 1999 health care revenue bonds, issued for Bloomsburg Hospital. The outlook is now stable. The lower rating reflects higher-than-expected operating losses that are not sustainable, given the thin levels of liquidity. However, management has made progress toward reducing losses in both 2007 and 2008, which is reflected by the stable outlook as S&P expect the rating to remain at 'B-' for the next several years, even as management is considering issuing additional debt. In addition, the 'B-' rating reflects an increase in capital investment, especially over the past two years, as the hospital attempted to recruit physicians and attract patients. Management is currently exploring issuing up to $10 million in additional debt for capital projects and to repay short-term borrowings, notes, and leases, which could have a favorable effect on debt service coverage. Ongoing operating losses with negative margins over the past five years and continuing year to date poses some concern--although at a much lower level with the hospital posting a profit from operations, particularly because employed physicians continue to post substantial losses annually. The hospital is also located in a competitive environment with 'AA' rated Geisinger Health System located just eight miles away. "The stable outlook reflects currently positive operating performance at the hospital, nursing home, and home health agency, while the physician corporation continues to lose money and drags the financial profile down -- although it is an integral contributor to the success of the hospital and nursing home," said Standard & Poor's credit analyst Cynthia Keller MacDonald. "As the practices mature, losses should drop, however the potential for costly turnovers at any physician corporation is always a risk," added Ms. Keller MacDonald. Standard & Poor's will evaluate future debt plans once they are solidified, but it is possible that the rating will be maintained since the debt will rebuild much needed liquidity and reduce riskier short-term debt. A lower rating is possible, especially if liquidity diminishes further or if operating losses increase again. Bloomsburg Health System serves part of Columbia County with a 2006 population of about 65,000. Bloomsburg itself has a population of slightly less than 13,000. While Bloomsburg Hospital is the only hospital in its primary service area, it operates in the shadow of Geisinger Health System. DEXTER AVENUE: Case Summary & Five Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Dexter Avenue L.P. 5817 Allentown Way Temple Hills, MD 20748 Bankruptcy Case No.: 08-19485 Chapter 11 Petition Date: July 24, 2008 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Stanton J. Levinson, Esq. (tiger110@earthlink.net) 2730 University Boulevard West Suite 201 Silver Spring, MD 20902 Tel: (301) 949-0039 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 Debtor's list of its five largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DTE Gas & Electric $110,000 Southfield Center 26801 Northwest Highway Southfield, MI 48034 DWSD Water $25,000 735 Randolph Street Detroit, MI 48226 City of Detroit - Treasurer $2,262 402 Coleman A. Young Municipal Center Detroit, MI 48226 AT&T Phone $1,000 James A. Abbott, Esq. Trade $725 DOLLAR GENERAL: S&P Affirms All Ratings; Revises Outlook to Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Goodlettsville, Tennessee-based Dollar General Corp. to stable from negative. S&P affirmed all ratings on the company, including the 'B' corporate credit rating. "The outlook revision reflects Dollar General's improved operating performance over the past several quarters," said Standard & Poor's credit analyst Ana Lai, "due to success from its turnaround strategies involving real estate pruning and improved merchandising from the elimination of its "packaway" inventory strategy." Credit protection measures have strengthened from very weak levels. DOWNEY FINANCIAL: Moody's Cuts Bank Financial Strength Rating to D ------------------------------------------------------------------ Moody's Investors Service downgraded the senior unsecured ratings of Downey Financial Corp. to B1 from Ba1. Downey Saving and Loan Association's bank financial strength rating was downgraded to D from D+, long term deposit rating to Ba2 from Baa3 and short-term deposits to Not Prime from Prime-3. All Downey ratings are under review for downgrade. This rating action followed Downey's statement of a second quarter 2008 loss of $219 million, driven by a provision for credit losses of $259 million. This represents Downey's fourth consecutive quarterly loss. As result Downey Savings and Loan Association's core and risk based capital ratios have fallen from 10.0% and 21.3% at June 30, 2007 to 7.6% and 14.3% at June 30, 2008. Although Downey's current capital ratios remain high in relation to other US banks, Moody's is concerned that this rapid decline in capital levels will continue due to provisioning needs on the company's residential mortgage portfolio. "We consider Downey's capital level to be its primary strength and it is being quickly eroded by its operating performance," Craig Emrick, Moody's vice president and senior credit officer, said. The review will focus on Downey's non-performing trend and operating result in the third quarter. Additionally the review will focus on any conclusion to the company's disclosed review of strategic alternatives. Downgrades: Issuer: Downey Financial Corp. -- Issuer Rating, Downgraded to B1 from Ba1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B1 from Ba1 Issuer: Downey Savings & Loan Association -- Bank Financial Strength Rating, Downgraded to D from D+ -- Issuer Rating, Downgraded to Ba2 from Baa3 -- OSO Rating, Downgraded to NP from P-3 -- Deposit Rating, Downgraded to NP from P-3 -- OSO Senior Unsecured OSO Rating, Downgraded to Ba2 from Baa3 -- Senior Unsecured Deposit Rating, Downgraded to Ba2 from Baa3 Outlook Actions: Issuer: Downey Financial Corp. -- Outlook, Changed To Rating Under Review From Negative Issuer: Downey Savings & Loan Association -- Outlook, Changed To Rating Under Review From Negative Downey Financial Corp. is the parent of thrift Downey Savings and Loan Association, both headquartered in Newport Beach, California. At June 30, 2008, Downey Financial Corp. reported assets of $12.6 billion. EMBARCADERO AIRCRAFT: Fitch Keeps 'C/DR6' Ratings on Three Classes ------------------------------------------------------------------ Fitch Ratings has affirmed Embarcadero Aircraft Securitization Trust as: -- Class A-1 notes affirmed at 'B-/DR1'; -- Class A-2 notes affirmed at 'B/DR1'; -- Class B notes remain at 'C/DR6'; -- Class C notes remain at 'C/DR6'; -- Class D notes remain at 'C/DR6'. Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft given the aviation market volatility and significantly elevated fuel prices. EAST was affirmed as it was found to have credit support consistent with its current ratings. FORD MOTOR: Improves Car Conversion Plan, Realigns Manufacturing ---------------------------------------------------------------- The Wall Street Journal reported that Ford Motor Co. will retool three North American truck plants to make small cars that it now makes and sells in Europe. WSJ related that the plan amounts to a gamble that small cars can save a company whose business has long been based on trucks. WSJ, citing Don Leclair, Ford's chief financial officer, said that Ford is in a stress period right now. Ford's U.S. business has been hit by declining vehicles sales and a sudden consumer shift to small cars. According to the Journal, Ford is slashing costs and shifting capacity to passenger-car production in amid the troublesome realities of the U.S. market. In a press statement, Ford disclosed a significant acceleration of its transformation plan with the addition of several new fuel- efficient small vehicles in North America and a realignment of its North American manufacturing. The actions represent a shift in Ford's North American product plans and investments toward smaller vehicles and fuel-efficient powertrains in both the near- and mid-term in line with rapid changes in customer buying preferences. In addition to bringing six small vehicles to North America from the company's acclaimed European lineup, Ford is accelerating the introduction of fuel-efficient EcoBoost and all-new four-cylinder engines, boosting hybrid production and converting three existing truck and SUV plants for small car production, beginning this December. "We continue to take fast and decisive action implementing our plan and responding to the rapidly changing business environment," Alan Mulally, Ford president and CEO, said. "Ford is moving aggressively using our global product strengths to introduce additional smaller vehicles in North America and to provide outstanding fuel economy with every new product." Mr. Mulally said the company is focused on its transformation plan, which calls for: -- aggressively restructuring to operate profitably at the current demand and changing model mix; -- accelerating the development of new products that customers want and value; -- financing the plan and improving the balance sheet; -- working together effectively as one team, leveraging Ford's worldwide assets "The progress we have made in working together to create a 'One Ford' global enterprise during the past two years gives us a unique competitive advantage in today's environment," Mr. Mulally said. "We are in a stronger position than ever to leverage Ford's global assets to address the North American business environment. We also are building on the past few years of progress in continuously improving our quality, reducing our cost structure and introducing strong new products." Aggressively Restructuring Ford will convert three existing North American truck and SUV plants for small car production, with the first conversion beginning this December. The moves are in addition to Ford's statements in May and June that it is reducing its North American production plans for large trucks and SUVs for the remainder of 2008, well as increasing production of smaller cars and crossovers. "We are transforming Ford's North American manufacturing operations into a lean, flexible system that is fully competitive with the best in the business," Mark Fields, Ford president of The Americas, said. "We remain committed to matching our capacity with real consumer demand, and we are equipping nearly all of our assembly plants with flexible body shops, ensuring we can respond quickly to changing consumer tastes." "In addition, we are adding four-cylinder engine capacity to meet the growing consumer demand, while expanding production of our new EcoBoost engines, six-speed transmissions and other fuel-saving technologies," Mr. Fields said. Among the manufacturing realignment actions are: -- Michigan Truck Plant in Wayne, Michigan, which builds the Ford Expedition and Lincoln Navigator full-size SUVs, will be converted beginning this December to production of small cars derived from Ford's global C-car platform in 2010. -- Production of the Ford Expedition and Lincoln Navigator will be moved to the Kentucky Truck Plant in Louisville, Kentucky, early next year. -- Cuautitlan Assembly Plant in Mexico, which produces F-Series pickups, will be converted to begin production of the new Fiesta small car for North America in early 2010. -- Louisville, Kentucky Assembly Plant, which builds the Ford Explorer mid- size SUV, will be converted to produce small vehicles from Ford's worldwide C-car platform beginning in 2011. -- Twin Cities, Minnesota Assembly Plant -- which was scheduled to close in 2009 -- will continue production of the Ford Ranger through 2011 to meet consumer demand for the compact pickup. -- Kansas City Assembly Plant this year will add a third crew to its small utility line for the Ford Escape, Escape Hybrid and Mercury Mariner and Mariner Hybrid. With the realignments, Ford will continue to offer targeted hourly buyouts at its U.S. plants and facilities, working with the UAW to secure competitive employment levels. Ford also said it remains on track to reduce salaried-related costs by 15% in North America by Aug. 1. Ford North America still expects to reduce annual operating costs by $5 billion by the end of 2008 -- at constant volume, mix and exchange, and excluding special items -- compared with 2005. In addition, the company said it plans to continue to reduce structural costs beyond 2008. The company also confirmed Ford, Lincoln and Mercury will remain in its North American brand portfolio. Ford said it will work with its dealers to broaden and accelerate its dealer consolidations, which will result in a dealer network that reflects the changing industry size and model mix. Ford also updated its North American planning assumptions, which include: -- U.S. economic recovery to begin by early 2010; -- U.S. industry sales to return to trend levels as the economy returns to health; -- Product mix changes are permanent, but some recovery will occur from the current share-of-industry for full-size pickups -- though not back to levels experienced previously -- as the economy and housing sector recover; * oil prices to remain volatile and high; * no near-term relief from current level of commodity prices * about 14% U.S. market share for Ford, Lincoln and Mercury brands Accelerating New Products Ford is adding several new North American products in the near- and mid- term, and shifting from a primary emphasis on large trucks and SUVs to smaller and more fuel-efficient vehicles. By the end of 2010, two-thirds of spending will be on cars and crossovers -- up from one-half. "We are accelerating the development of the new products customers want and value," Mr. Mulally said. "We sell some of the best vehicles in the world in our profitable European and Asian operations, and we will bring many of them to North America on top of our already aggressive product plans." The new products include six European small vehicles to be introduced in North America by the end of 2012. Ford's European products are set apart by their world-class driving dynamics, exciting design and outstanding quality. "While we have no intention of giving up our longtime truck leadership, we are creating a new Ford in North America on a foundation of small, fuel-efficient cars and crossovers that will set new standards for quality, fuel economy, product features and refinement," Mr. Fields said. The Ford, Lincoln, Mercury line will be almost completely upgraded by the end of 2010, including: -- 2009 Ford F-150, on sale in late fall with the most capability, most choice and most smart features of any full- size pickup, and with more than a 7 percent fuel economy improvement; -- 2010 Ford Fusion, Mercury Milan, Lincoln MKZ sedans, on sale in early 2009, with Fusion's and Milan's four-cylinder fuel economy expected to top Honda Accord and Toyota Camry; -- 2010 Ford Fusion Hybrid and Mercury Milan Hybrid, beginning production late this year and on sale in early 2009 -- with fuel economy expected to top the Toyota Camry hybrid; -- New Ford Mustang -- coupe, convertible, and glass-roof models -- in early 2009; -- New Ford Taurus sedan -- with EcoBoost engine and even more advanced safety and convenience technologies -- in mid-2009; -- New European Transit Connect small multi-purpose van in mid- 2009; -- New Lincoln seven-passenger crossover -- with EcoBoost engine -- in mid-2009; -- New European Ford Fiesta, in both four- and five-door versions, in early 2010; -- New European Ford Focus, in both four- and five-door versions, in 2010; -- New Mercury small car in 2010; -- New European small vehicle that will be a "whitespace" entry in North America in 2010; -- Next-generation Ford Explorer -- with unibody construction, EcoBoost, six-speed, weight savings and improved aerodynamics for up to 25 percent better fuel economy - in 2010. With every new product, Ford expects to be the best or among the best for fuel economy. This is aided by one of the most extensive powertrain upgrades ever for Ford. By the end of 2010, nearly all of Ford's North American engines will be upgraded or replaced. In addition, within two years, nearly all of Ford's North American lineup will offer fuel-saving six-speed automatic transmissions. The improvements build on several Ford fuel economy such as: -- 2009 Ford Flex, which is the most fuel-efficient standard seven-passenger vehicle on the market, topping the 2009 Honda Pilot; -- 2009 Ford Focus, with highway fuel economy of up to 35 mpg; -- better than the smaller 2008 Honda Fit and 2009 Nissan Versa SL and a key reason Focus retail sales are up 50%; -- 2009 Escape, with a new 2.5-liter four-cylinder engine and six-speed transmission delivering best-in-class highway fuel economy of 28 mpg -- ahead of Toyota RAV4 and Honda CR-V; -- 2009 Ford Escape Hybrid, delivering 34 mpg in the city and 31 mpg on the highway, making it the most fuel-efficient utility vehicle available; Coming in 2009 are the first applications of Ford's new EcoBoost engines. EcoBoost uses gasoline turbocharged direct-injection technology for up to 20% better fuel economy, up to 15% fewer CO2 emissions and superior driving performance versus larger- displacement engines. EcoBoost V-6 engines will be introduced on several vehicles next year, beginning with the Lincoln MKS and Ford Taurus sedans, and Ford Flex crossover. Four-cylinder EcoBoost engines will debut in 2010 in both North America and Europe. Ford will offer EcoBoost on more than 80% of its North American lineup by the end of 2012. Ford also plans to double capacity for North American four- cylinder engines to more than 1 million units by 2011, to meet the consumer trend toward downsized engines for fuel economy. The smaller engines will deliver significant fuel savings. In addition, Ford plans to double its hybrid volume and offerings next year -- and is looking to expand further going forward. Production of the all-new 2010 Ford Fusion Hybrid and Mercury Milan Hybrid begins in December -- with fuel economy expected to top the Toyota Camry hybrid. With these new models, the Ford Escape Hybrid -- now in its fifth year of production -- and the Mercury Mariner Hybrid, Ford will offer four hybrid vehicles. That will make Ford the largest domestic producer of full hybrid vehicles in North America, second only to Toyota in sales volume. Ford also is introducing six-speeds with PowerShift that offers the fuel economy of a manual transmission and convenience of an automatic; start-stop engines that shut off when the vehicle stops; electric power steering; direct injection, and Twin Independent Variable Cam Timing engines. These technologies will be progressively introduced within the North American lineup by 2012. "One Ford" Driving Ford's product transformation is the company's "One Ford" worldwide product development vision, which will deliver more vehicles worldwide from fewer core platforms, further reduce costs and allow for the increased use of common parts and systems. In the next five years, Ford will build more than 1 million vehicles a year worldwide off its global B-car platform and nearly 2 million units worldwide off its global C-car platform. "Ford is investing most where consumer growth is taking place -- and that's in highly fuel-efficient global small cars," said Derrick Kuzak, Ford group vice president of Global Product Development. "One of every four vehicles in the world today is a 'C' or Ford Focus-sized vehicle, and we expect the segment to grow more than 20% to 6 million units in North America and 25 million worldwide by 2012. We see similar strong growth in the B-segment, where the Fiesta competes." With Ford's worldwide product development plan, all of the company's vehicles competing in worlwide segments will be common in North America, Europe and Asia within five years. In addition to B- and C-sized small cars, the company's Fusion- and Mondeo- sized C/D cars and utilities will be common globally. The same will be true for commercial vans. Ford said it is positioned to take advantage of its scale, already acclaimed worldwide products and the strength of the Ford brand around the world to respond to the changing marketplace and to begin to grow profitably. The company said its success in growing market share and profits with smaller, more fuel-efficient vehicles in Europe is now the template around the world. "We remain absolutely committed to creating an exciting, viable Ford going forward -- and to transforming Ford into a lean global enterprise delivering profitable growth over the long term," said Mr. Mulally. "We continue to make progress on every element of our transformation plan, and we are taking decisive steps in the near term to ensure our long-term success." About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4'. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3-billion of senior convertible notes due 2036. FORSTER DRILLING: W. Scott Resigns as Secretary and Treasurer ------------------------------------------------------------- Forster Drilling Corporation disclosed in a regulatory fling with the Securities and Exchange Commission that on June 25, 2008, W. Scott Thompson resigned as the company's secretary and treasurer. About Forster Drilling Headquartered in Houston, Forster Drilling Corporation (OTC BB: FODL.OB) -- http://www.forsterdrilling.com/-- is engaged in in the refurbishing land drilling rigs and deploying them for use by oil and natural gas producers. Currently, the company provides contract land drilling services in New Mexico to two different oil and gas company customers. Forster Drilling Corp.'s consolidated balance sheet at Feb. 29, 2008, showed $15,050,904 in total assets and $16,088,602 in total liabilities, resulting in a $1,037,698 total stockholders' deficit. Going Concern Doubt LBB & Associates Ltd., LLP, in Houston, expressed substantial doubt about Forster Drilling Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Nov. 30, 2007. The auditing firm pointed to the company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2008. FRONTIER AIRLINES: Posts $60MM Net Loss in Year Ended March 31 -------------------------------------------------------------- Frontier Airlines Inc. filed its annual report for the fiscal year ended March 31, 2008, on Form 10-K with the U.S. Securities and Exchange Commission. Frontier recorded a net loss of $60,253,000 or $1.64 per diluted share, which covers: * a decrease in fuel expense for non-cash mark to market derivative gains of $1,847,000 and realized cash settlements of $30,740,000 on fuel hedging contracts; * a post-retirement liability curtailment gain of $6,361,000; * $8,454,000 of start-up costs for Lynx Aviation; * $3,339,000 in accelerated depreciation for our seat replacement project; * $1,791,000 in net losses on sales of assets; and * $442,000 in employee separation cost. Frontier increased passenger revenue by 17.4%, which is a result of increasing its capacity by 12.0% while increasing passenger yields by 4.5%. The increase in passenger revenue can be primarily attributed to the increase in load factor year-over- year by 4.9 points and an increase of 1.1% of the average fare. Frontier has relatively low operating expenses excluding fuel because it currently operates a single fleet of aircraft on its mainline routes in a single class of service with high aircraft utilization rates. Frontier submits that its losses over the past three years have been primarily driven by rising fuel costs. The average fuel cost per gallon, including hedging activities, was $2.45 for the year ended March 31, 2008 compared to $2.12 for the year ended March 31, 2007, showing an increase of 15.6%. Since March 31, 2008, Frontier's aircraft fuel expense has increased by approximately 60% excluding the benefits of hedging, which would have equated to an estimated $325,000,000 increase in fuel expense on an annualized basis to the financial results. Additionally, the Company continues to operate in a highly competitive pricing environment, which limits its ability to increase fares to offset high fuel costs. The aggregate market value of common stock held by non-affiliates of the Company as reported by the Nasdaq National Market as of September 30, 2007, was $226,812,395. The number of shares of the Company's common stock outstanding as of June 23, 2008 is 36,945,744. As of March 31, 2008, there were 1,727 holders of record of the Company's stock. The Company does not anticipate paying dividends on its common stock in the foreseeable future. Cost Structure In December 2007, Frontier announced a reduction to indirect labor work force by 10%. The jobs eliminated were corporate jobs not directly related to flight operations and resulted in a severance accrual of $442,000 with annual savings of $2,900,000. The sale of the additional aircraft in September and October, if completed, will force the Company to reevaluate its exiting workforce and adjust accordingly. In May 2008, the Company reached agreements with the pilot and dispatchers unions on temporary wage and benefit concessions. In June 2008, the Teamsters Union, which represents approximately 450 mechanics, tool room employees and others, also agreed to temporary wage and benefit concessions. All other employees were given wage reductions effective June 1, 2008. After a thorough fleet analysis and taking account of the dramatic increases in the price of fuel and the potential impacts of a slowing economy, the Company has elected to sell a total of 11 aircraft, which allows it to slow its capacity growth and improve its cash position. Hence, for fiscal 2009, Frontier expects to reduce mainline capacity by approximately 10% versus fiscal 2008. Revenues and Expenses Mainline passenger showed an increase of 17.4% from the previous year. Revenue from passenger tickets flown generated 90.4% of its mainline passenger revenue and increased $163,894,000 or 17.5% over the prior year. Other revenues -- comprised principally of the revenue from the marketing component of co-branded credit card, interline and ground handling fees, liquor sales, LiveTV sales, pay-per-view movies and excess baggage fees -- totaled $42,463,000. The total mainline operating expenses totaled $1,253,904,000, showing an increase of 17.2%, from the previous year, and represented 99.0% of total mainline revenue. Flight operations expenses increased 11.3% from 2007's results, due to an increase in mainline block hours. Labor Workforce As of June 23, 2008, Frontier had approximately 6,170 employees -- including 806 pilots, 1,121 flight attendants, 1,512 customer service agents, 193 scouts and on-call personnel, 749 ramp service agents, 449 reservations agents, 151 aircraft appearance agents, 100 catering agents, 533 mechanics and related personnel, and 558 general management and administrative personnel -- of which approximately 20% are represented by unions. Salaries, wages and benefits increased 13.5% and were 22.0% of total mainline revenue, resulting from an increase in the number of full-time equivalent employees to support Frontier's continued capacity growth. Pilot and flight attendant salaries before payroll taxes and benefits increased 10.1% compared to results ending March 31, 2007. Aircraft Fuel Frontier's aircraft fuel expenses for the year was reduced by non-cash mark to market derivative gains of $1,847,000 and cash settlements of $30,740,000 received from a counterparty. During the years ended March 31, 2008, 2007, and 2006, jet fuel, including hedging activities and our regional partner operations, accounted for 35.3%, 31.8% and 31.1%, of Frontier's operating expenses. The Company has arrangements with major fuel suppliers for substantial portions of fuel requirements to assure an adequate supply of fuel for current and future operations. Jet fuel costs are subject to wide fluctuations as a result of sudden disruptions in supply beyond our control; hence, the Company cannot predict the future availability and cost of jet fuel with any degree of certainty. Bankruptcy-Related Financials As of the Petition Date, Frontier had in excess of $108,000,000 in unrestricted cash, cash equivalents and short-term investments. The Company's ability, both during and after the Chapter 11 cases, to continue as a going-concern is dependent upon, among other things, its ability (i) to successfully achieve required cost savings to complete restructuring; (ii) to maintain adequate liquidity; (iii) to generate cash from operations; (iv) to secure financing; (v) to negotiate favorable terms with bankcard processors and credit card companies; (vi) to confirm a plan of reorganization under the Bankruptcy Code; and (vii) to achieve profitability. As of June 23, 2008, the average price per gallon of fuel was approximately $4.22. Due to Frontier's Chapter 11 filing, all fuel hedge contracts outstanding as of March 31, 2008, were terminated in May 2008, and subsequently settled, which resulted in cash receipts of $23,409,000. Frontier discloses that it currently does not have any further hedging contracts in place. A plan of reorganization could materially change the amounts that are currently in Frontier's consolidated financial statements, the SEC filing disclosed. A full-text copy of Frontier's annual report is available for free at: http://ResearchArchives.com/t/s?301a FRONTIER AIRLINES HOLDINGS, INC., ET AL. Consolidated Balance Sheet As of March 31, 2008 ASSETS CURRENT ASSETS: Cash and cash equivalents $120,837,000 Short-term investments 8,501,000 Restricted investments 74,119,000 Receivables, net 57,687,000 Prepaid expenses and other assets 26,428,000 Inventories, net 17,451,000 Assets held for sale 1,263,000 -------------- Total current assets 306,286,000 Property and other equipment, net 870,444,000 Security and other deposits 25,123,000 Aircraft pre-delivery payments 12,738,000 Restricted investments 2,845,000 Deferred loan expenses and other assets 32,535,000 -------------- Total Assets $1,249,971,000 ============== LIABILITIES AND STOCKHOLDERS' DEFICIT Liabilities not subject to compromise: CURRENT LIABILITIES: Accounts payable $79,732,000 Air traffic liability 226,017,000 Other accrued expenses 84,058,000 Current portion of long-term debt 38,232,000 Short-term borrowings 3,139,000 Deferred revenue and other liabilities 18,189,000 -------------- Total current liabilities 449,367,000 Long-term debt related to aircraft notes 532,086,000 Convertible notes 92,000,000 Deferred revenue and other liabilities 24,399,000 -------------- Total Liabilities $1,097,852,000 Commitments and contingencies: STOCKHOLDERS' EQUITY: Preferred stock - Common stock 37,000 Treasury stock - Additional paid-in capital 195,874,000 Unearned ESOP shares (616,000) Accumulated other comprehensive loss, net (299,000) Retained deficit (42,877,000) -------------- Total Stockholders' Equity 152,119,000 -------------- Total Liabilities and Stockholders' Equity $1,249,971,000 ============== FRONTIER AIRLINES HOLDINGS, INC., ET AL. Consolidated Statement of Operations Year Ended March 31, 2008 Revenues: Passenger $1,350,427,000 Cargo 6,091,000 Other 42,463,000 -------------- Total revenues 1,398,981,000 Operating expenses: Flight operations 186,120,000 Aircraft fuel 454,822,000 Aircraft lease 116,099,000 Aircraft and traffic servicing 188,245,000 Maintenance 106,166,000 Promotion and sales 131,645,000 General and administrative 64,490,000 Operating expense -- regional partners 146,211,000 Post-retirement liability curtailment gain (6,361,000) Employee separation and exit costs 442,000 Loss on sales of assets, net 1,791,000 Depreciation 44,641,000 -------------- Total operating expenses 1,434,311,000 -------------- Business interruption insurance proceeds 300,000 --------------- Operating loss (35,030,000) Non-operating income (expense): Interest income 12,048,000 Interest expense (36,444,000) Loss from early extinguishment of debt (283,000) Other, net (645,000) -------------- Total non-operating expense, net (25,324,000) Loss before income tax benefit (60,354,000) Income tax benefit (101,000) --------------- Net Loss ($60,253,000) =============== FRONTIER AIRLINES HOLDINGS, INC., ET AL. Consolidated Statement of Cash Flow Year Ended March 31, 2008 Cash flows from operating activities: Net Loss ($60,253,000) Adjustments to reconcile net loss to net cash in operating activities: Compensation expense 2,653,000 Depreciation and amortization 46,176,000 Provisions recorded on inventories 1,423,000 Loss on sales of assets, net 1,791,000 Mark to market derivative gains (1,847,000) Post-retirement liability curtailment gain (6,361,000) Loss on early extinguishment of debt 283,000 Deferred income taxes - Changes in operating assets and liabilities: Restricted investments (31,275,000) Receivables (2,415,000) Prepaid expenses and other assets (374,000) Inventories (1,927,000) Other assets (1,021,000) Accounts payable 27,731,000 Air traffic liability 42,263,000 Other accrued expenses 10,578,000 Deferred revenue and other liabilities 3,248,000 -------------- Net cash provided by operating activities 30,673,000 Cash flows from investing activities: Aircraft lease and purchase deposits applied (28,332,000) Decrease in restricted investments - Purchase of available-for-sale securities (10,000,000) Sale of available-for-sale securities 1,200,000 Proceeds from the sale of property and equipment 917,000 Proceeds from sale-leaseback transactions 92,525,000 Capital expenditures (350,844,000) --------------- Net cash used in investing activities (294,534,000) Cash flows from financing activities: Net proceeds from issuance of common stock 40,000 Purchase of treasury shares - Payment to bank for compensating balance - Proceeds form long-term borrowings 297,525,000 Payments received on note receivable 716,000 Principal payments on aircraft notes (113,961,000) Payments on short-term borrowings - Payment of financing fees (2,603,000) -------------- Net cash provided by financing activities 181,717,000 Net decrease in cash and cash equivalents (82,144,000) Cash and cash equivalents at beginning of year 202,981,000 -------------- Cash and cash equivalents at end of year $120,837,000 ============== 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. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GAYLE PROPERTY: Case Summary & Five Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Gayle Property Ventures, LLC aka Crossroads Entertainment 4103 Baltimore Ave. Bladensburg, MD 20710 Bankruptcy Case No.: 08-19491 Chapter 11 Petition Date: July 24, 2008 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtors' Counsel: John Douglas Burns, Esq. (burnslaw@burnslaw.algxmail.com) 6303 Ivy Lane, Ste. 102 Greenbelt, MD 20770 Tel: (301) 441-8780 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb08-19491.pdf GPS INDUSTRIES: Files Patent Infringement Suit Against Prolink -------------------------------------------------------------- GPS Industries, Inc. said on July 17, 2008, that the company has filed suit for patent infringement in the United States District Court for the Northern District of Illinois against ProLink Holdings Corp., ProLink Solutions, LLC, ABC National Television Sales Inc., and LinksCorp Inc. The suit alleges infringement of U.S. Patent No. 5,685,786, which relates to on-screen display of centrally transmitted advertising and tournament standings information. GPSI has also asserted U.S. Patent No. 5,438,518, which relates to the company's position-based hole advance and screen scrolling technology. The complaint also alleges that the ProLink companies have made false representations in the marketplace and in connection with financing activities that they own rights in the '518 patent, when in fact they hold no interest in the patent and are not authorized to utilize the technology it covers. David Chessler, chief executive officer of GPS Industries, said: "Today's filing is an important step in our strategy to establish the company's patent rights through the court system and to clear up the confusion ProLink has attempted to create in the marketplace. Our management team and key investors are committed to pursuing this legal strategy to a successful outcome. GPS Industries has invested millions of dollars in its intellectual patent portfolio. We have a responsibility to our investors and shareholders to vigorously defend these patents against any infringing parties." About GPS Industries Headquartered in Surrey, B.C. Canada, GPS Industries Inc. (OTC BB: GPSN.OB) -- http://www.gpsindustries.com/-- develops and markets GPS and Wi-Fi multimedia solutions to enable managers of golf facilities, resorts, and residential communities to improve operational efficiencies and generate significant new revenue streams. As reported in the Troubled Company Reporter on May 29, 2008, the company's consolidated balance sheet at March 31, 2008, showed $31,278,000 in total assets, $26,125,000 in total liabilities, and $5,153,000 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cbc Going Concern Doubt Sherb & Co., LLP, in New York, expressed substantial doubt about GPS Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company has incurred significant losses and has a working capital deficiency. GSAMP TRUST: S&P Puts Default Ratings on Two Loan Classes --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the B-4 classes from GSAMP Trust's series 2005-SD1 and 2006-SD2 to 'D' from 'CC'. The affected classes experienced principal write-downs during the June 2008 remittance period. As of the June 2008 distribution period, cumulative realized losses for series 2005-SD1 and 2006-SD2 were 5.73% and 9.25%, respectively, of the original pool balances. Total delinquencies were 42.93% and 51.97% of the current principal balances, respectively. Series 2005-SD1 is 40 months seasoned, and series 2006-SD2 is 23 months seasoned. These transactions have outstanding pool factors of 28.11% and 57.09%, respectively. If delinquencies continue to translate into realized losses, S&P will likely take further negative rating actions on the outstanding classes from these transactions. Subordination, overcollateralization, and excess interest cash flow provide credit support for these deals. The collateral originally consisted of 30-year, fixed-rate, closed-end second- lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-SD1 B-4 D CC 2006-SD2 B-4 D CC IESI CORP: S&P Affirms 'BB' Long-Term Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on waste management company IESI Corp., including the 'BB' long-term corporate credit rating. The outlook is stable. The ratings on IESI are based on the consolidated credit profile of its parent, BFI Canada Income Fund, which exercises management control and decision-making on IESI's business and financial strategy. "BFI Fund's credit profile reflects the limited diversity of its operating subsidiaries, reliance on landfill expansion and acquisitions for growth, and the constraint in financial flexibility under the current income trust structure," said Standard & Poor's credit analyst Greg Pau. Favorable industry growth supported by recession-resistant demand, relatively low exposure to the cyclical construction and demolition segment, and an improving market position in its selected regional markets offset these factors. Through its primary operating subsidiaries, IESI and BFI Canada Holdings Inc., BFI Fund is a midsize participant in the highly fragmented waste management business, ranking sixth largest in North America by revenue. BFI Fund lacks diversity compared with larger competitors such as Waste Management Inc. (BBB/Watch Neg/A- 2). This modest diversity is evident in BFI Fund's relatively small number of landfills and narrower geographic reach. Moreover, it relies significantly on landfill expansion and permitting, which is projected to be about 43% of existing landfill airspace, for future business growth. Timing of obtaining expansion permits is not within the operators' control and delays are not uncommon. This is because the permitting process requires numerous feasibility assessments and multiple levels of government approval. BFI Fund benefits from its efficient operations and steady EBITDA margin at 30% in the past three years, despite cost pressure from escalating fuel prices. This was achieved largely through contributions from the higher margin Canadian market, the fund's effort to improve route density and profitability, and effective integration of acquired companies. BFI Fund's strategy of focusing on selected high-growth and densely populated regions has supported its strong market position as one of the top three players in more than 85% of the markets it serves. As supply growth in waste management services remains constrained by limited availability of landfill and transfer facilities, incumbent players should retain their market positions and bargaining power. The outlook is stable, reflecting that the recent deterioration in financial measures and constraint in financial flexibility are partly mitigated by stable industry operating conditions, continued focus in efficiency, and lower permit renewal risks. S&P could lower the rating or revise the outlook on IESI if BFI Fund's financial measures further deteriorate with adjusted debt to EBITDA over 3.5x or adjusted FFO to debt below 20% on a sustained basis, or it materially increases its exposure to the weak C&D and industrial segments. Conversely, S&P could raise the rating or revise the outlook on IESI if BFI Fund's financial flexibility materially improves through successful reduction in distribution requirement and/or equity issuance. This could be facilitated by its conversion to a corporation status, and improvement in financial measures toward its original targets, with adjusted debt to EBITDA below 2.5x or adjusted FFO to debt over 30% on a sustained basis. IKON OFFICE: S&P Holds 'BB-' Rating and Changes Outlook to Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Malvern, Pennsylvania-based IKON Office Solutions Inc. to stable from negative. At the same time, S&P affirmed its 'BB-' corporate credit rating on the company. "The outlook revision reflects an improved financial profile following recent debt reductions and improvements in operating results," said Standard & Poor's credit analyst Lucy Patricola. The rating on IKON reflects the company's lack of revenue growth, mature and highly competitive industry conditions, relatively modest market position in the global document services market, and management's more aggressive stance toward shareholder returns. These factors are offset partially by IKON's significant recurring revenue base and consistent profitability. IKON is the leading independent provider of document management systems and services, with fiscal 2007 revenues of $4.2 billion. INFOGROUP INC: S&P Keeps 'BB' Rating Under Negative CreditWatch --------------------------------------------------------------- On July 24, 2008, Standard & Poor's Rating Services said that its 'BB' rating on infoGROUP Inc. remains on CreditWatch with negative implications, where it was placed March 11, 2008. The company announced on July 22, 2008 that the special litigation committee formed by infoGROUP's Board of Directors has completed its independent review and concluded that various related-party transactions, expense reimbursements, and corporate expenditures were excessive. In response to the committee's findings, the company has implemented a number of corporate governance initiatives. While Standard & Poor's views these measures positively, the rating remains on CreditWatch with negative implications until S&P can assess whether the committee's report has any impact on the SEC's informal investigation. In addition, S&P would not remove the ratings from CreditWatch until the company files its 10-K for the fiscal year ended Dec. 31, 2007, its 10-Q for the quarter ended March 31, 2008, and its 10-Q for the quarter ended June 30, 2008. The company's amended credit agreement requires infoGROUP to file its 10-K and first-quarter 10-Q on or before Aug. 15, 2008, and its second quarter 10-Q on or before Aug. 29, 2008. The rating was initially placed on CreditWatch after the company announced it would delay its filings, potentially leading to a default under its credit facilities. The company stated that it was unable to file its 10-K and 10-Q reports on time due to the ongoing investigation by the Denver regional office of the SEC. Lenders subsequently provided amendments ultimately extending the filing dates. S&P's concerns regarding the informal investigation by the SEC and the formation of a special litigation committee were heightened given that these developments led to filing delays. In November 2007, the company announced that the Denver regional office of the SEC requested voluntary production of documents regarding related-party transactions, expense reimbursement, other corporate expenditures, and certain trading in infoGROUP's securities. At that time, S&P released a bulletin stating that it would monitor these inquiries into infoGROUP's governance practices, and developments relating to the progress of a Delaware lawsuit alleging conflicts of interest from certain transactions. Although the SEC has not escalated the investigation to formal status, the delay in financial filings concerns us. S&P expect to resolve the CreditWatch listing once it determine whether the report has any bearing on the SEC's informal investigation, and the company files its delayed financial statements. Ratings List Ratings Remaining On CreditWatch infoGROUP Inc. Corporate Credit Rating BB/Watch Neg/-- Secured Loan Facility BB/Watch Neg Recovery Rating* 3 * Standard & Poor's does not place its recovery ratings on CreditWatch; however, this does not preclude our recovery assessment from potentially changing in the future. IRIDIUM SATELLITE: S&P Keeps 'B-' Rating on $170MM Facilities ------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery ratings on Bethesda, Maryland-based Iridium Satellite LLC's (B-/Negative/--) $170 million aggregate first-lien credit facilities to '4' from '3', indicating expectations for average (30%-50%) recovery of principal in the event of a payment default. The issue ratings on these first-lien credit facilities remain at 'B-', the same as the corporate credit rating on Iridium. The recovery rating revision is primarily the result of a decrease in the insolvency proxy due to the reevaluation of the projected default year to 2010. The issue-level rating on the company's $40 million, second-lien term loan remains unchanged, at 'CCC', two notches below the corporate credit rating, and the recovery rating on this debt is still '6', indicating expectations for negligible (0%-10%) recovery in the event of a payment default. Ratings List Iridium Satellite LLC Ratings Affirmed Corporate Credit Rating B-/Negative/-- First-lien Term Loan B- Second-lien Term Loan CCC (Recovery Rtg: 6) Recovery Ratings Revised To From -- ---- First-lien Term Loan Recovery Rating 4 3 ISTAR FINANCIAL: Fitch Cuts Preferred Stock Rating to BB from BB+ ----------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating and outstanding debt ratings of iStar Financial Inc. as: -- IDR to 'BBB-' from 'BBB'; -- Unsecured revolving credit facilities to 'BBB-' from 'BBB'; -- Senior unsecured notes to 'BBB-' from 'BBB'; -- Convertible senior floating rate notes to 'BBB-' from 'BBB'; -- Preferred stock rating to 'BB' from 'BB+'. The Rating Outlook remains Negative. The rating action affects approximately $11 billion of obligations. The downgrade is driven primarily by the decrease in the earnings power of iStar's loan portfolio, due to asset impairments and loan loss provisions of nearly $725 million that iStar will have taken between Sept. 30, 2007, the first quarter in which iStar owned the assets associated with the Fremont Investment & Loan transaction, and June 30, 2008. While this decrease in earnings power has not manifested itself in declining EBITDA fixed charge coverage levels, Fitch believes that iStar's coverage metrics will decline over the next twelve months. iStar's ratio of EBITDA to fixed charges was 1.8 times for both the twelve months ended March 31, 2008 and March 31, 2007, respectively. However, because non-cash impairments are not subtracted in calculating EBITDA, this ratio does not capture an anticipated decline in cash interest income generation from the company's loan portfolio. Leverage has increased modestly since Fitch revised iStar's Rating Outlook to Negative from Stable on Feb. 15, 2008. iStar's leverage increased to 3.5x as of March 31, 2008 from 3.3x as of Sept. 30, 2007, but up markedly from 2.6x as of June 30, 2007, the quarter-end period immediately prior to the close of the Fremont transaction. iStar's Negative Outlook is predicated on continued concern that the slowdown in the commercial real estate debt capital markets and moderating fundamentals will have adverse effects on the company's earnings, portfolio quality and cash flows for the remainder of 2008. Reduced capital availability will likely impact many of iStar's borrowers, who historically have sold assets or refinanced their loans via the secured debt markets to repay iStar loans. In addition, the continued slowdown in the single-family residential sector and a slowing economy are affecting the timing and amount of repayment of condominium construction loans assumed in connection iStar's acquisition of Fremont General Corporation's commercial real estate lending business and retained interest in Fremont's commercial real estate loan portfolio. The decreased ability of iStar's borrowers to repay loans reduces the company's ability to meet future funding obligations and debt maturities, and may result in the company increasing its borrowings or raising external capital to address these uses of cash. Offsetting these credit weaknesses are iStar's strengths in structuring capital solutions for its customers and its diversified portfolio of mortgages, subordinated debt and leases. In addition, iStar has taken several steps to address near-term debt maturities and liquidity concerns Fitch noted in revising the company's Outlook to Negative in February 2008. iStar repaid shorter-term indebtedness by raising approximately $741 million via a senior notes offering in May 2008, $948 million in first mortgage debt in May 2008 and by generating cash from sold assets of approximately $815 million since the beginning of 2008. An offsetting factor is that secured debt now comprises approximately 15% of total debt, a level that hinders financial flexibility and reduces the unencumbered asset pool available for unsecured bondholders. In resolving the Negative Outlook back to Stable, Fitch will look for iStar to maintain EBITDA fixed charge coverage above 1.7x over the next twelve months and also maintain adequate liquidity to address future funding obligations and debt maturities. Fitch deems the current 3.5x leverage level appropriate for the 'BBB-' rating category, but would anticipate that leverage will decline slightly over the next 18 months as the company repays indebtedness from loan maturities. Headquartered in New York City, iStar provides structured financing and corporate leasing of commercial real estate nationwide. iStar leverages its expertise in real estate, capital markets, and corporate finance to serve real estate investors and corporations with sophisticated financing requirements. As of March 31, 2008, iStar had $16.5 billion of undepreciated real estate assets and $3.3 billion of undepreciated book equity. IVANHOE ENERGY: Closes C$90 Athabasca Oilsands Assets Acquisition ----------------------------------------------------------------- Robert Friedland, executive chairman, president and chief executive officer of Ivanhoe Energy Inc. disclosed that on July 11, 2008, the company completed the acquisition of Talisman Energy Canada's 100% working interests in two leases (Leases 10 and 6) located in the heart of the Athabasca oilsands region in the Province of Alberta, Canada. Talisman Energy Canada is an affiliate of Talisman Energy Inc. The total purchase price is C$90 million, of which an initial payment of C$22.5 million has been made from proceeds of an C$88 million private placement financing that closed on July 8, 2008. The acquisition of Lease 10 will provide the site for the first commercial application of Ivanhoe Energy's proprietary, HTL(TM) heavy-oil upgrading technology in a major, integrated heavy-oil project. Lease 10 has a relatively high level of delineation (four wells per section). It is believed to be a high-quality reservoir and an excellent candidate for thermal recovery production using the SAGD (steam-assisted gravity drainage) process. The Lease 10 reservoir characteristics are believed by Ivanhoe to be similar to those at Petro-Canada's 30,000-barrel-per-day MacKay River project, located nearby, across the Athabasca River. MacKay River is acknowledged to be one of the most successful and longest-producing SAGD projects in the Athabasca oil sands. Lease 10 would be capable of producing between 30,000 and 50,000 barrels of oil per day, based on estimates by independent reservoir engineers Sproule Associates Limited. Based on the most recent evaluations conducted by Sproule, Lease 10 is estimated to contain, on a best-estimate basis, approximately 244 million barrels of contingent bitumen resources (with low and high estimates of approximately 188 million and 313 million barrels, respectively). The evaluation of Lease 10 has an effective date of Aug. 31, 2007. Using Sproule's interpretation of net pay, Ivanhoe expects to encounter an average of 30 metres of continuous bitumen saturated sand within the initial development area. Based on these contingent resource estimates, Ivanhoe Energy's acquisition price of C$90 million represents a price of approximately C$0.37 per barrel of contingent bitumen resource measured on a best-estimate basis, with a range of approximately C$0.29 per barrel on a high-estimate basis to approximately C$0.48 per barrel on a low-estimate basis. Since Ivanhoe Energy's oilsands announcement of the preliminary agreement between the company and Talisman on May 29, 2008, the holder of the 25% working interest in Lease 50 has exercised its right of first refusal to acquire Talisman's 75% working interest in Lease 50 – a third lease that Ivanhoe was to acquire from Talisman. Lease 50 is a less-delineated asset located approximately 19 km southeast of Fort McMurray. Contingent bitumen resources attributable to Talisman's 75% working interest in Lease 50 were estimated by Sproule as of July 31, 2006, to be, on a best-estimate basis, approximately 50 million barrels. As a consequence, Ivanhoe Energy has proceeded to purchase Lease 10 and Lease 6 – and the total purchase price has decreased from C$105 million to C$90 million. Lease 50 was considered by Ivanhoe to represent possible expansion potential. The reduced cost to Ivanhoe of acquiring its principal target, Lease 10, leaves Ivanhoe with additional cash resources to initiate the development of Lease 10 and also allows Ivanhoe to apply its resources to alternative expansion targets as appropriate. Lease 6 is a small, undelineated, 680-acre block 1.6 km south of Lease 10. Talisman's Rights Talisman will retain back-in rights of up to 20% in the acquired leases for a period of three years. During this period, Talisman also will have the right of first offer to acquire any participation interests in heavy-oil projects in Alberta that Ivanhoe wishes to sell, excluding the acquired leases, on mutually agreeable terms. In addition, Ivanhoe and Talisman have entered into an HTL Data Monitoring Agreement to allow Talisman to effectively monitor the commercial effectiveness of Ivanhoe's HTL technology. Lease 10 Lease 10 is a 6,880-acre contiguous block located approximately 10 miles (16 km) northeast of Fort McMurray, immediately south of Suncor's operating Steepbank and Millennium projects. The block also adjoins leases held by ExxonMobil, Laricina Energy and E-T Energy. Benefits of HTL Integration HTL is a field-located upgrading process that converts heavy oil to a transportable, partially upgraded synthetic crude oil and converts the upgrading by-products to onsite energy. The process frees the heavy-oil producer from the need to purchase diluent for transport, significantly eliminates the need to purchase natural gas to steam the reservoir, and allows the producer to capture the majority of the heavy-oil/light-oil value differential. The net result is enhanced rates of return and reduced earnings volatility. Furthermore, the HTL process is technically and economically scalable down to as low as 10,000- 30,000 bopd, allowing for vertical integration of smaller, heavy- oil assets in Canada and internationally. Purchase Details Ivanhoe has purchased all of Talisman's interests in Leases 10 and 6. The total purchase price for the two leases is C$90 million, allocated as follows: 1. C$22.5 million cash that has been paid. 2. A C$12.5 million note, with interest at prime plus 2%, is to be repaid on or before Dec. 31, 2008. 3. A C$40 million, three-year convertible note, with interest at prime plus 2% with principal convertible at C$3.13, which represents a 25% premium to Ivanhoe Energy's share price based on the volume-adjusted, weighted-average closing price for the 10 business days prior to the signing of the preliminary agreement on May 29, 2008. If the note were fully converted, 12,779,552 common shares of Ivanhoe Energy would be issued to Talisman, representing approximately 4.44% of the issued and outstanding shares of Ivanhoe Energy as of July 11, after giving effect to the conversion, as well as the C$88 million financing that just closed. 4. C$15 million cash upon Ivanhoe Energy receiving requisite government and other approvals to develop the northern border of Lease 10, which is subject to a Mineral Surface Lease (MSL) held by Suncor. Ivanhoe's obligations under the notes and the contingent payment are secured. Ivanhoe intends to finance future payments with funds from a combination of strategic investors or traditional debt and equity markets, either at the Ivanhoe Energy Inc. level or project level. Financial Advisor Tristone Capital Inc. is acting as financial advisor to Ivanhoe for this transaction. About Ivanhoe Energy Vancouver, British Columbia, Canada, Ivanhoe Energy Inc. (TSX: IE; Nasdaq: IVAN) -- http://www.ivanhoe-energy.com/-- is an independent international heavy oil development and production company focused on pursuing long-term growth in its reserve base and production using advanced technologies, including its proprietary, patented heavy-oil upgrading process (HTL). Core operations are in the United States and China, with business development opportunities worldwide. Ivanhoe Energy has established a number of geographically focused entities. The parent company, Ivanhoe Energy Inc., will pursue HTL opportunities in the Athabasca oilsands of Western Canada and will hold and manage the core HTL technology. Two new subsidiaries have been established, one for Latin America and one for the Middle East & North Africa, complementing Sunwing Energy Ltd., Ivanhoe Energy's existing, wholly-owned company for China. Ivanhoe Energy Inc. owns 100% of each of these subsidiaries, although the percentages are expected to decline as they develop their respective businesses and raise capital independently. At March 31, 2008, the company's consolidated balance sheet showed $231.1 million in total assets, $41.2 million in total liabilities, and $189.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2eab Going Concern Doubt Ivanhoe Energy Inc. believes that existing conditions cast substantial doubt about its ability to continue as a going concern. The company incurred a net loss of $8.5 million for the three-month period ended March 31, 2008, and as at March 31, 2008, had an accumulated deficit of $168.5 million and negative working capital of $8.8 million. In addition, the company currently anticipates incurring substantial expenditures to further its capital investment programs and the company's cash flows from operating activities will not be sufficient to both satisfy its current obligations and meet the requirements of these capital investment programs. Moreover, recovery of capitalized costs related to potential HTL(TM) and GTL projects is dependent upon finalizing definitive agreements for, and successful completion of, the various projects, the outcome of which is uncertain. IXI MOBILE: Reduces Board Co-Chairman's Annual Salary by One-Third ------------------------------------------------------------------ On July 14, 2008, the Board of Directors of IXI Mobile Inc. (the approved Addendum No. 2 to the employment agreement of Gideon Barak, executive co-chairman of the Board of the company. The Addendum modifies Mr. Barak's existing employment agreement, dated Jan. 1, 2006 (as amended on Feb. 28, 2006). The Addendum provides that, retroactively to April 1, 2008, Mr. Barak's salary has been reduced by one-third to $140,000 annually and, in consideration therefor, he will be granted 62,420 shares of the company's common stock. The Addendum will terminate upon the earlier to occur of (i) March 31, 2009, or (ii) the date of the termination of Mr. Barak's employment with the company. As of the date of termination of the Addendum, the terms of Mr. Barak's employment agreement with the company, as amended by Addendum No. 1, will be restored. In addition, the Board approved an increase in the number of shares of common stock available for issuance under the company's 2003 Israeli Stock Option Plan (as previously amended) by 350,000 to 4,104,291. About IXI Mobile Headquartered in Belmont, California, IXI Mobile Inc. (OTC BB: IXMO.0B) -- http://www.ixi.com/-- provides devices and hosted services to mobile operators, mobile virtual network operators, and Internet service providers in a number of international markets. * * * As reported in the Troubled Company Reporter on July 16, 2008, the company's consolidated balance sheet at March 31, 2008, showed total assets of $34,728,000, and total liabilities of $35,314,000, resulting in a $586,000 stockholders' deficit. JED OIL: Needs Additional Capital to Fund Operations ---------------------------------------------------- JED Oil, Inc., filed its 2007 annual report on Form 20-F on July 15, 2008, with the U.S. Securities and Exchange Commission. In that report, the company's auditor, Meyers Norris Penny LLP in Calgary, Canada, related that "the company's ability to continue as a going concern is dependent on obtaining sufficient working capital and financing to fund future operations." Going Concern Uncertainty The company posted net income of $10,539,797 on petroleum and natural gas revenues of $14,859,110 for the year ended Dec. 31, 2007, as compared with a net loss of $74,152,821 on petroleum and natural gas revenues of $25,253,253 in the prior year. Revenue has declined in 2007 compared to 2006 due to the result of significant asset sales in the fourth quarter of 2006 that impacted 2007 production, additional sales in the second quarter of 2007 and normal production declines. The impact of these sales was partially offset by the purchase of Caribou's assets. It is expected that 2008 will see a significant increase in revenue as a result of the drilling program, as wells come on-stream from those efforts. During the year ended Dec. 31, 2007, JED Oil realized a negative cash flow from operating activities of $503,405. The gain on sale of petroleum and natural gas properties of $12,301,908 was primarily responsible for the net income for the year ended Dec. 31, 2007. At Dec. 31, 2007, the company had a stockholders' deficit and a consolidated working capital deficit of $48,996,421. The company's large working capital deficiency and change in working capital from the prior year are as a result of the Convertible Note Payables becoming current during the year. The company requires additional funds to maintain operations and discharge liabilities as they become due. These conditions raise substantial doubt about the company's ability to continue as a going concern. The gain on sale of petroleum and natural gas properties and issues of common shares relating to the purchase of Caribou Resources Corp. during 2007 has significantly reduced the stockholder's deficiency. The company settled a contract for drilling services during the year ended Dec. 31, 2007, that resulted in a loss of $1,931,327 and a payment by the drilling contractor to JED Oil, Inc., of an equal amount in cash. In the previous year, as at Dec. 31, 2006, the company had recorded significant non-cash write-downs of its petroleum and natural gas assets totaling $49,570,895 relating to impairments of Canadian assets and $16,444,640 relating to impairments of U.S. assets. These substantial losses in 2006 have contributed to an accumulated deficit of $73,353,000 at Dec. 31, 2007. There were no write-downs required for 2007. Indebtedness The holders of the company's 10% Senior Subordinated Convertible Notes have agreed to restructure the Notes and provide for their redemption. Under the terms of the agreement, the company has until May 15, 2008, to complete the credit facility offered by a Canadian Chartered Bank of around $32,000,000. Net proceeds from the loan facility will be used to repay about $26,000,000 of the outstanding notes plus accrued interest, an extension fee, and to reduce the working capital deficiency. Notes in the amount of about $14,000,000 will be amended or replaced and an additional note in the amount of $4,000,000 will be issued for cash, which will be applied to the working capital deficit. These notes will pay interest quarterly at a rate of 12% per annum and be convertible into common shares of JED at an exercise price of $1.25 per share. Around $11,000,000 of the Notes will have a maturity date of 1 year from the date of closing and Notes totaling around $7,000,000 will mature two years from the closing date. On July 1, 2008, the holders of the company's 10% Senior Subordinated Convertible Notes have agreed to extend the Maturity Date for the redemption of the of the Notes, originally Feb. 1, 2008, to Sept. 30, 2008, to allow the company to sell assets to redeem the Notes, or to Oct. 21, 2008, if the sale transaction will require shareholder approval. Preferred shareholders of the company have agreed to an extension to the redemption date of their shares from Feb. 1, 2008, to Feb. 1, 2010, and have received a reduced conversion price to acquire common shares at $3.50 per share over that period. The agreement reduces the company's current cash requirement to redeem the preferred shares by $28,760,000 until 2010. AMEX Non-Compliance Notice In a letter dated April 12, 2007, the company received a notice from the American Stock Exchange that at Dec. 31, 2006, the company was not in compliance with Section 1003(a)(i) of the AMEX Company Guide. This section requires that a listed company must have either $2,000,000 in shareholders' equity or not have sustained losses from continuing operations or net losses in two out of three of its most recent fiscal years. The company submitted a detailed plan to AMEX on May 22, 2007, outlining the steps it has taken and will take to bring the company back into compliance no later than Oct. 13, 2008. The plan has been approved by the AMEX Listings Qualifications Department and the company will continue its listing during the plan period of up to 18 months, subject to periodic review. In the event that the company does not make progress towards compliance consistent with its approved plan, or is not in compliance at the end of the plan period, the company may be subject to delisting proceedings by AMEX. Compliance may be achieved through the company either showing profits from continuing operations and a net profit for fiscal 2007 or by increasing shareholders' equity to at least $2,000,000. Milestones in the plan submitted to AMEX that have been achieved include the sale of petroleum and natural gas properties, which was completed June 8, 2007, the acquisition of Caribou Resources Corp., which was closed on July 31, 2007, and the renegotiation of the terms of the preferred shares to extend the redemption provision to Feb. 1, 2010, which was approved by the shareholders on July 30, 2007. The company also completed drilling it had proposed in the plan and returned to profitability for the fourth quarter and the year ended Dec. 31, 2007. The refinancing of the 10% Senior Subordinated Convertible Notes also fulfills a milestone within the company's plan. The company must remain profitable in 2008 as a further milestone to be accomplished. The company received another letter from AMEX on July 15, 2008. The second notice expressed concern about JED's ability to be in compliance by Oct. 13, 2008, with Section 1003(a)(iv) of the AMEX Company Guide, due to the extensions of the maturity date of the company's outstanding $40.240 million of Convertible Notes and announced plans to sell assets to redeem the Convertible Notes. By Aug. 5, 2008, JED must submit an Additional Plan, including its strategic initiatives and specific milestones. If AMEX approves the Additional Plan, JED will continue to have until Oct. 13, 2008, to be in compliance with Section 1003(a)(iv) of the AMEX Company Guide. If such a plan is not submitted by JED, or is not accepted by AMEX, the company may be subject to delisting proceedings. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $79,615,893 in total assets and $95,676,919 in total liabilities, resulting in $16,061,026 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $13,382,554 in total current assets available to pay $62,378,975 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?2ff7 2007 Highlights The most significant event during 2007 was the acquisition of Caribou Resources Corp., which was completed in the third quarter. Funds were provided mainly through the sale of the North Ferrier and Sousa properties in Alberta as well as by the issuance of about 8,853,000 common shares of JED. The acquisition was completed on July 31, 2007, and the operations of Caribou have been included in the consolidated statements of operations from that date forward. Caribou is a wholly owned subsidiary of JED and its name has been changed effective Aug. 1, 2007, to JED Production, Inc. The acquisition was accounted for as a business combination using the purchase price method of accounting. The fair market value of the liabilities assumed has been adjusted to equal the value of the consideration paid. Prior to the acquisition, Caribou had filed for protection under the Canadian Companies' Creditors Arrangement Act and therefore the acquisition was completed under plans of arrangement pursuant to the Business Corporations Act (Alberta) and the CCAA. The company had an active fourth quarter of 2007 with the implementation of its strategy of growth through the development of its Northern Alberta properties. The company's production for the fourth quarter of 2007, averaged 1,005 BOE/d compared with 1,278 BOE/d in the same quarter of 2006, and 907 BOE/d for the year 2007 compared with 1,659 BOE/d in 2006. Production is lower overall due to the sale of North Ferrier and Sousa assets. Production from the purchased assets has been increased substantially in late December due to the drilling program that began in late November 2007. The company's production exit rate at the end of 2007 was 2,108 BOE/d. The initial capital program will extend through the first quarter of 2008. About JED Oil JED Oil, Inc. (AMEX: JDO) -- http://www.jedoil.com/-- is an independent energy company that explores, develops, and produces natural gas, crude oil, and natural gas liquids in Canada and the United States. As of Dec. 31, 2007, it had total proved reserves of 3,035,000 of barrels of oil equivalent. The company was founded in 2003 and is headquartered in Didsbury, Canada. JIM PALMER: ActionView Seeks Legal Representative to Begin Talks ---------------------------------------------------------------- ActionView International Inc. said it has decided to seek legal counsel to begin dialog with Jim Palmer Trucking Inc., the company it had planned to acquire and to which it has provided a loan prior to the latter's bankruptcy. In May, ActionView International announced a letter of intent to acquire Jim Palmer Trucking. As reported in the Troubled Company Reporter on July 21, 2008, Actionview said that as part of its intent, ActionView provided a $250,000 loan to Jim Palmer Trucking on May 5, 2008. Two entities of Jim Palmer Trucking filed for Chapter 11 on July 10. A report in Today's Trucking.com on July 16 quotes Steven Peacock, ActionView CEO, saying "The financial information we received in our early due diligence on Jim Palmer Trucking does not appear to be consistent with their true financial condition at that time.” Mr. Peacock says management will "continue to monitor the situation as it develops, especially as it relates to the capital that was loaned to Jim Palmer Trucking as part of the proposed acquisition..." ActionView also related that it has targeted several new acquisition candidates that operate in different industries, including trucking, recycling technology and media/advertising. The company is in discussions with the targeted companies and has begun its initial due diligence on each. About ActionView International Inc. Based in Vancouver, British Columbia, ActionView International Inc. (OTCBB: AVWI) -- http://www.actionviewinternational.com/-- through ActionView, its wholly owned subsidiary, is engaged in the business of designing, marketing and manufacturing proprietary illuminated, programmable, motion billboard signs for use in airports, mass transit stations, shopping malls, and other high traffic locations to reach people on-the-go with targeted messaging. About Jim Palmer Trucking Headquartered in Missoula, Montana, Jim Palmer Trucking Inc. -- http://www.jimpalmertrucking.com/-- offers truckload transportation of temperature-controlled cargo. The company operates throughout the US from terminals in Missoula, Montana; Salina, Kansas; and Tampa. The Debtor and two of its affiliates filed for separate Chapter 11 protection on July 15, 2008, (Bankr. D. Mont. Lead Case No.: 08- 60922) James A. Patten, Esq. represents the Debtors in their restructuring efforts. The Debtors have $11,897,554 in total assets and $12,089,808 in total debts. JOY DYEING: Robinson Diamant Approved as Bankruptcy Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California gave Joy Dyeing & Finishing Inc. permission to employ Robinson Diamant & Wolkowitz, APC, as its bankruptcy counsel. The firm will render legal services to the Debtor with respect to the powers, duties, rights and obligations of a debtor-in- possession, the formulation and preparation of a plan of reorganization and a disclosure statement for the plan, and to prepare on behalf onf the Debtor all legal documents as may be necessary, as well as perform other legal services as are required in the chapter 11 case. Presently, the firm's billing rates vary from $185 to $580 per hour, depending on the professional handling the case: Attorney 2008 Rate -------- --------- Diamant, Lawrence A., Esq. $580 Wolkowitz, Edward M., Esq. $575 Gross, Irving M., Esq. $535 Gasteier, Philip A., Esq. $535 Kappler, Douglas D., Esq. $520 Yoo, Timothy J., Esq. $500 Faith, Jeremy W., Esq. $385 Tan, Carmela Maria Z., Esq. $300 Frealy, Todd A., Esq. $300 Royzman, Natella, Esq. $220 Paralegal 2008 Rate --------- --------- Richardson, Myrna R. $185 The Debtor has paid the firm $100,000 prepetition retainer. At the bankruptcy filing, the firm incurred $29,905 in fees and costs, which was applied against the retainer. The $70,095 of the retainer remains unpaid postpetition and is placed in a segregated trust account on the Debtor's behalf. The Debtor had told the Court that the firm has no adverse interest against the estate and is a disinterested person. The firm can be reached at: Philip A Gasteier, Esq. Principal Robinson Diamant & Wolkowitz, APC 1888 Century Park East, Suite 1500 Los Angeles, CA 90067 Tel: (310) 277-7400 Fax: (310) 277-7584 http://www.rdwlawyers.com/ About Joy Dyeing Los Angeles, California-based Joy Dyeing & Finishing Inc. owns and operates wool broadwoven fabric mill. It employs 95 full-time workers at its plant that can process 50,000 lbs. of fabric daily. It filed a chapter 11 petition on April 24, 2008 (Bankr. C.D. Calif. Case No. 08-15480). Judge Thomas B. Donovan presides over the case. Philip A Gasteier, Esq., Robinson Diamant & Wolkowitz, APC, represents the Debtor in its restructuring efforts. The Debtor's schedules show $15,420,355 in total assets and $10,625,938 in total liabilities. JOY DYEING: Files Schedules of Assets and Liabilities ----------------------------------------------------- Kyong Sub Hwang, president of Joy Dyeing & Finishing Inc., delivered to the U.S. Bankrutpcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property $9,600,000 B. Personal Property 5,820,355 C. Property Claimed as Exempt D. Creditors Holding Secured $9,805,342 Claims E. Creditors Holding Unsecured 5,095 Priority Claims F. Creditors Holding Unsecured 842,500 Nonpriority Claims TOTAL ---------- ----------- $15,420,355 $10,625,938 About Joy Dyeing Los Angeles, California-based Joy Dyeing & Finishing Inc. owns and operates wool broadwoven fabric mill. It employs 95 full-time workers at its plant that can process 50,000 lbs. of fabric daily. It filed a chapter 11 petition on April 24, 2008 (Bankr. C.D. Calif. Case No. 08-15480). Judge Thomas B. Donovan presides over the case. Philip A Gasteier, Esq., Robinson Diamant & Wolkowitz, APC, represents the Debtor in its restructuring efforts. JOY DYEING: Markets Los Angeles Building for $9.7 Million --------------------------------------------------------- Joy Dyeing & Finishing Inc. is selling its real property, a 10,000-square foot structure in Los Angeles, pursuant to a proposed $9.7 million sale-leaseback agreement, Terry Brennan of The Deal reported. To date, the Debtor has not named a formal purchaser nor provided update to its marketing efforts. The Deal revealed, citing court filings, that the Debtor's effort in January 2008 to sell the property for $9.6 million had failed. The Debtor generated $10 million in 2007 but started to experience financial difficulties early this year, based on the report. About Joy Dyeing Los Angeles, California-based Joy Dyeing & Finishing Inc. owns and operates wool broadwoven fabric mill. It employs 95 full-time workers at its plant that can process 50,000 lbs. of fabric daily. It filed a chapter 11 petition on April 24, 2008 (Bankr. C.D. Calif. Case No. 08-15480). Judge Thomas B. Donovan presides over the case. Philip A Gasteier, Esq., Robinson Diamant & Wolkowitz, APC, represents the Debtor in its restructuring efforts. The Debtor's schedules show $15,420,355 in total assets and $10,625,938 in total liabilities. JOY DYEING: Court Approves Postpetition Factoring Deal with Hana ---------------------------------------------------------------- Joy Dyeing & Finishing Co. Inc. obtained authority from the Hon. Thomas Donovan of the U.S. Bankruptcy Court for the Central District of California to access Hana Financial Inc.'s debtor-in- possession financing pursuant to a postpetition factoring, loan and security agreement between the parties. The Debtor is authorized to borrow an additional amount of $200,000 from Hana in accord with the terms of a promissory note. The note bears an interest at 7% per annum and is payable together with the interest and a processing fee of 1% of the principal amount on Dec. 24, 2008. Hana will be secured by a first priority security interest in all of the Debtor's postpetition assets. Also, through Sept. 30, 2008, the Debtor is authorized to use cash collateral. As adequate protection for the Debtor's use of cash collateral, Hana, First Standard Bank, and the U.S. Internal Revenue Service will be given replacement liens in the Debtor's postpetition assets in which the creditors hold valid prepetition liens. The Debtor will pay IRS $3,000 monthly on or about the 5th of each month. The Debtor will pay monthlty interest to First Standard Bank on second and third loans owed to the bank, commencing July 1, 2008. The Debtor was directed to pay all other interest accrued postpetition on the third loan. Interest payments to First Standard Bank will be computed and payable under the Court's order at the non-default rate. First Standard Bank reserves the right to asset and collect interest rate at the default rate, if there are any. The Court directed the Debtor to provide financial reports to Hana, First Standard Bank and the IRS. The purchase of accounts by Hana under the factoring agreement will be free and clear of liens and interests, subject to the Debtor's right to payments and to the replacement liens. Upon an event of default under the postpetition financing agreement, Hana may seek relief from automatic stay to enforce its rights and remedies to its postpetition collateral upon at least five business days prior written notice. The order was issued despite opposition filed by First Standard Bank and a joinder objection filed by the IRS. About Joy Dyeing Los Angeles, California-based Joy Dyeing & Finishing Inc. owns and operates wool broadwoven fabric mill. It employs 95 full-time workers at its plant that can process 50,000 lbs. of fabric daily. It filed a chapter 11 petition on April 24, 2008 (Bankr. C.D. Calif. Case No. 08-15480). Judge Thomas B. Donovan presides over the case. Philip A Gasteier, Esq., Robinson Diamant & Wolkowitz, APC, represents the Debtor in its restructuring efforts. The Debtor's schedules show $15,420,355 in total assets and $10,625,938 in total liabilities. JPMORGAN CHASE: S&P Junks Ratings on Three Classes of Certificates ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on eight classes of commercial mortgage pass-through certificates from JPMorgan Chase Commercial Mortgage Securities Trust 2006-LDP9. Concurrently, S&P affirmed its ratings on 25 other classes from the same series. The downgrades reflect anticipated credit support erosion upon the eventual resolution of the six specially serviced loans. In addition, the lowered ratings reflect concerns regarding nine of the loans that have reported debt service coverage levels that are below 1.0x. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. There are six assets ($62.5 million, 1.3%) with the special servicer, LNR Partners Inc., five of which are delinquent. One is current (0.5%), another loan is in foreclosure (0.3%), and two are 90-days-plus delinquent (0.4%). Details for the assets are: -- Two of the five delinquent assets with the special servicer, The Claridge Apartment Homes and The Chancellor Apartment Homes, were MBS Cos.-sponsored loans collateralized by class C multifamily properties in Texas. Both were transferred in October 2007 and recently became real estate owned. The Claridge Apartment Homes is a 173- unit multifamily property in Houston and has a total exposure of $10.6 million. An appraisal reduction amount of $1.3 million went into effect in November 2007 after the asset was appraised for $9.6 million. The Chancellor Apartment Homes loan has a total exposure of $9.6 million and is secured by a 224-unit multifamily property in Houston. An ARA of $2.3 million went into effect in November 2007 after the asset was appraised for $7.6 million. Standard & Poor's expects a moderate loss upon the resolution of both REO assets. -- The Colonial Grand at Palma Sola loan has a total exposure of $23.3 million. A 340-unit multifamily property in Bradenton, Florida, secures this loan. The loan was transferred to the special servicer on June 27, 2008, due to technical default. The lockbox was triggered when the property's cash flow fell below the required threshold. As of Dec. 31, 2007, the DSC was 1.10x and occupancy was 95%. At this time, the loan presents minimal loss potential. -- The TWG Illiana Portfolio loan has a total exposure of $12.1 million and is secured by five suburban offices within the Chicago metropolitan statistical area. The loan was transferred in December 2007. The master lessee on all five properties filed for bankruptcy and eventually rejected the lease. Three of the properties are currently 100% vacant and two are 50% occupied. LNR is pursuing a deed-in-lieu foreclosure. Standard & Poor's expects a moderate loss upon the resolution of this asset. -- The Casa & Villa Cortez loan has a total exposure of $6.5 million. Two student housing properties with a total of 140 units in Tallahassee, Florida, secure this loan. This loan was transferred in May 2008 for monetary default. At issuance, the DSC was 1.31x and occupancy was 98%. Based on available market information, Standard & Poor's expects a moderate loss upon liquidation. -- The Grand Court Office loan has a total exposure of $2.8 million. The loan is secured by a 22,875-sq.-ft. suburban office in Grand Blanc, Michigan. This loan was transferred in June 2008 for monetary default. Minimal information on the transfer is available at this time. As of Dec. 31, 2007, DSC was 0.87x and occupancy was 81%. As of the July 15, 2008, remittance report, the collateral pool consisted of 251 loans with an aggregate trust balance of $4.836 billion, compared with the same number of loans totaling $4.854 billion at issuance. This transaction has three master servicers: Capmark Finance Inc., Midland Loan Services Inc., and Wachovia Bank N.A. They reported financial information for 94% of the pool. Ninety-one percent of the servicer-provided information was full-year 2007 data. Excluding one of the specially serviced assets and the largest loan in the pool, The Belnord, which is discussed below, there are 16 loans in the pool totaling $402 million (12%) with reported DSCs lower than 1.0x. The loans are secured by various properties with an average balance of $25.1 million. These loans have seen an average decline in DSC of 45.2% since issuance. Standard & Poor's calculated a weighted average DSC of 1.52x for the pool, compared with 1.50x at issuance. To date, the trust has experienced no losses. The master servicers reported a watchlist of 23 loans ($1.2 billion, 25%). The largest loan, The Belnord ($375 million, 8%), is secured by a fee simple first-lien mortgage interest in a 215-unit apartment complex and a 60,514-sq.-ft. retail space located in New York. The loan appears on the watchlist because it reported a low DSC of 0.47x as of year-end 2007. A $50 million reserve was established for debt service shortfalls and residential turnover/buyout costs during the term of the loan. The remaining balance for the debt service reserve is $35.8 million. Occupancy was 98% as of year-end 2007. The third-largest loan, Galleria Towers ($232 million, 5%), is secured by a first mortgage fee interest in three class A office buildings comprising approximately 1,428,314 sq. ft. located in Dallas. The loan was placed on the watchlist due to a low DSC. However, Midland has confirmed that the DSC as of Dec. 31, 2007, was 1.13x. This loan will be removed from the watchlist in the next reporting period. The fifth-largest loan, Americold Portfolio ($194 million, 4%), is secured by a first-lien mortgage securing a fee interest in four temperature-controlled warehouse/distribution facilities located in Carthage, Missouri, Fort Worth, Texas, West Point, Mississippi, and Garden City, Kansas. The loan appears on the watchlist due to low DSC. As of Dec. 31, 2007, DSC was 0.9x. The eighth-largest loan, Centro Heritage Portfolio III ($143 million, 3%), is secured by a first-lien mortgage in a fee interest in 14 retail centers consisting of approximately 2,630,728 sq. ft. located in Illinois, Missouri, Michigan, Wisconsin, Kansas, Iowa, and Indiana. The loan appears on the watchlist due to uncertainty facing the financial position of its sponsor, Centro Properties Group. As of Dec. 31, 2007, DSC was 2.33x and the occupancy for the portfolio was 89%. The top 10 loans have an aggregate outstanding balance of $1.98 million (41%). Excluding the Belnord loan, Standard & Poor's calculated a weighted average DSC of 1.51x, down from 1.76x at issuance. Four of the top 10 loans are on the master servicer's watchlist and were discussed above. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. Six were characterized as "excellent," and the rest were characterized as "good." The credit characteristics of the Belnord, the Merchandise Mart, the Centro Heritage Portfolio, the Raytheon LAX, the Tysons Galleria, and the Studio 6 Hotel loans are consistent with those of investment-grade obligations. Details of the largest two are: -- The Belnord has a balance of $375.0 million (8%). Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The Merchandise Mart loan is the sixth-largest loan in the pool and has a trust balance of $175.0 million (4%) and whole loan balance of $350.0 million. The whole loan consists of two pari passu participations; one participation is securitized in the CMT 2007-GG9 transaction, and the other participation is securitized by JPMorgan Chase Commercial Mortgage Securities Trust 2006-LDP9. For the year ended Dec. 31, 2007, DSC was 2.37x, and occupancy was 99%. A first mortgage encumbering the 3,448,680-sq.-ft., 25 story class A mixed-use building in the central business district of Chicago secures this loan. The building comprises 1.97 million sq. ft. of showroom space, 1.0 million sq. ft. of office space, 386,090 sq. ft. of trade show space, and 73,996 sq. ft. of retail space. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. 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 JPMorgan Chase Commercial Mortgage Securities Trust 2006-LDP9 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ H BB+ BBB- 2.76% H-S BB+ BBB- 2.76% J B+ BB+ 2.38% K B BB 2.01% L B- BB- 1.76% M CCC+ B+ 1.51% N CCC B 1.38% P CCC- B- 1.13% Ratings Affirmed JPMorgan Chase Commercial Mortgage Securities Trust 2006-LDP9 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.11% A-1S AAA 30.11% A-2 AAA 30.11% A-2S AAA 30.11% A-2SFL AAA 30.11% A-3 AAA 30.11% A-3SFL AAA 30.11% A-1A AAA 30.11% A-M AAA 20.08% A-MS AAA 20.08% A-J AAA 11.29% A-JS AAA 11.29% B AA 9.29% B-S AA 9.29% C AA- 8.66% C-S AA- 8.66% D A 7.28% D-S A 7.28% E A- 6.15% E-S A- 6.15% F BBB+ 5.02% F-S BBB+ 5.02% G BBB 4.02% G-S BBB 4.02% X AAA N/A KEY DEVELOPERS: Judge Williamson Approved Disclosure Statement -------------------------------------------------------------- The Hon. Michael G. Williamson of the U.S. Bankruptcy Court for the Middle District of Florida conditionally approved a disclosure statement explaining a Chapter 11 plan of reorganization for Key Developers Group LLC filed by KeyBank National Association on July 23, 2008. Judge Williamson held that the KeyBank's disclosure statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. A hearing is set for Aug. 27, 2008, to consider confirmation of KeyBank's Chapter 11 plan. The hearing will take place at 801 North Florida Avenue in Courtroom 8A in Tampa, Florida. Objections, if any, are due Aug. 20, 2008. Before it bankruptcy filing, the Debtor entered into a credit agreement with KeyBank, as lender, to provide financing of up to $67,000,000 in loan. Subsequently, the Debtor completed an amended promissory note wherein the amount of the loan was increased to $72,000,000. KeyBank asserted duly perfected and valid liens on substantially all of the Debtor's assets. As of the Debtor's bankruptcy filing. About $48 million remained outstanding under the loan. KeyBank's proposed Chapter 11 plan contemplates, among other things: a) the creation of the liquidating trust; b) the vesting of all of the Debtor's assets, excluding the sale assets in the liquidating trust upon confirmation of KeyBank's plan; c) the appointment of a liquidating trustee to administer the liquidating trust; d) the approval of a sale in conjunction with the confirmation of KeyBank's plan; e) the establishment of KeyBank's plan account; and f) the completion of distribution to holder of allowed claim under KeyBank's plan. Larry Hyman of Michael Moecker & Associates Inc., will serve as liquidating trustee. He is expected to wind-down the Debtor's assets, prosecute any litigation claims and execute the distributions under the plan. On July 22, 2008, the Court approved the Debtor's proposed bidding procedures for the sale of substantial portion of its asset located at Channelside Drive, free and clear of liens and interest, subject to better and higher offers. At the auction, the designated stalking-horse bidder KeyBank will be entitled to credit bid up to $37 million. In the event the Debtor consummate the sale to another party, KeyBank will receive a $3.7 million break-up fee. The assets up for sale will be purchase on an "as is, where is" basis, with no representation or warranties of any kind. The sale will be consummated following the entry of a final non-appealable confirmation order. Classification of Interests and Claims The plan classifies interests against and claims in the Debtor in seven classes. The classification of interests and claims are: Class Type of Claims ----- -------------- 1 Tax Lien (Secured) Claims 2 Secured Claim of KeyBank National as lender and agent 3 Secured Claims of Bovis Lend Lease Inc. 4 Mechanics' and other Lien Claims 5 Secured Claims of Deposit Claimants 6 Unsecured Claims 7 Equity Interest Impaired Classes 1,2,3,4 and 6 are entitled to vote on the plan. Class 1 tax lien claims for ad valorem real property taxes, totaling $76,000, will be paid in full. Class 2 secured claim of KeyBank, totaling $48,000,000, will be reduced by the net proceeds of the sale of the Debtor's assets. Holders of Class 3 and 4 secured claims will be paid the remaining collateral securing their claims. Holders of Class 6 unsecured claims, totaling $2,788,000, will receive cash distribution from the liquidating trust on account of their allowed unsecured claims on a pro rata basis. All claims of insider -- including Key Developers Group Mezz LLC, Key Developers Group Management LLC, Key Developers Investment LLC, Fida Sirdar Hussain, and Jamal Mansour -- will be subordinate to payment in full of Class 6 claims. Holders of Class7 equity interests will not receive any distribution and interests will be canceled upon confirmation. A full-text copy of KeyBank's disclosure statement is available for free at http://ResearchArchives.com/t/s?3008 A full-text copy of KeyBank's Chapter 11 plan of reorganization is available for free at http://ResearchArchives.com/t/s?3009 About Key Developers Tampa, Florida-based Key Developers Group LLC is a real estate developer. Its developments include a 469-unit, The Place at Channelside I and II. The Place at Channelside I, an-8-floor building, was completed in 2007, while The Place at Channelside II, a 32-floor building, was never built. Its president is Fida Sirdar Hussain. Key Developers filed for chapter 11 on March 5, 2008 (Bankr. M.D. Fla. Cas No. 08-02929). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser PA represents the Debtor in its restructuring efforts. According to Bloomberg News, Key Developers listed total asset of $2.6 million and total debts of $53.4 million. LID LTD: Files Ch. 11 Liquidation Plan and Disclosure Statement --------------------------------------------------------------- LID Ltd. filed with the U.S. Bankruptcy Court for the Southern District of New York a Chapter 11 plan of liquidation and a disclosure statement explaining that plan. A hearing is set for Aug. 20, 2008, at 10:00 a.m., in Courtroom 601, to consider approval of the adequacy of the Debtor's disclosure statement. The plan contemplates the utilization of cash held by its estate and the liquidation of the Debtor's remaining assets which consist of (i) claims the Debtor hold which are presently pursued through litigation; (ii) about $1,000,000 in cash; and (iii) a $257,000 net operating loss carry back receivable. The plan provides the creation of certain bank accounts to hold proceeds of the wind- down of the Debtor's assets. The plan further provides for the appointment of a distribution agent to facilitate the recovery of assets. The Debtor has commenced 35 adversary proceedings to certain entities -- including Zale Corp., Five T. Diamonds Corp., Janel Manufacturing Co. Inc., Palomar Jewelers Inc., and Benton Enterprises -- seeking money judgment to collect goods with respect to its accounts receivable. The Debtor sold certain of its assets to Bidz.com Inc., AV Jewelry of New York, Fairway Diamond Inc. and Kiran Jewels Inc. for $32,850,000 under an asset purchase agreement dated May 14, 2008. A full-text copy of the Assets Purchase Agreement is available for free at: http://ResearchArchives.com/t/s?2c2e The proceeds of the sale were distributed to the banks including (i) a $1,117,500 in expenses related to the coast associated with the sale of the Debtor's assets, which payment was treated as a reduction of the banks' secured claims. Classification and Treatment of Claims Under the plan, all claims against the Debtor, other than administrative claims and priority tax claims, are classified into eight classes. The classification of interests and claims are: Class Type of Claims ----- -------------- 1 Priority Non-Tax Claims 2 Secured Claims of Bank Leumi USA 3 Secured Claim of ABN AMRO Bank, N.V. 4 Secured Claim of Sovereign Bank, New England 5 Allowed Secured Claim of HSBC Bank USA National Association 6 Unsecured Claims 7 Affiliate Claims 8 Interests All allowed administrative expenses and priority tax claims will be paid in full from the initial unsecured creditor distribution after the plan's effective date. Holders of Class 1 allowed priority non-tax claims will also be paid in full from the initial unsecured creditor distribution after the plan's effective date. Class 2,3,4 and 5 holders will receive its share of the proceeds of the remaining collateral, which consist of the proceeds of the accounts receivable, after the payment of the carve-out funds and less the approved expenses related to the liquidation of the Debtor's estate including fees and expenses of the distribution agent and the Debtor's counsel. If remaining collateral is insufficient, the banks' claim will be treated Class 6 unsecured claim. At present, the Debtor owe in the aggregate amount of $42 million in secured debt plus interest, fees, costs and other amounts to the banks pursuant to a loan agreements. Each holder of a Class 6 unsecured claim -- excluding the banks' unsecured deficiency claims -- will receive its pro rata distribution on account of its allowed claim of the initial unsecured creditor distribution after payment of allowed Class 1 priority tax claims and allowed priority claims. Moreover, Class 6 holders including the banks will receive a pro rata distribution of $200,000 from the distribution fund by the distribution agent under the plan. In addition, after the banks are repaid an aggregate of $200,000 representing one-half of the carve-Out funds, Class 6 holders receive from the distribution fund pro rata distributions made by the distribution agent under the plan. Class 6 holders are entitled to vote on the plan. Class 7 affiliate claims will be subordinate to Class 6 claims with respect to distributions made under the plan. Class 7 holders are not entitled to vote on the Plan and will be deemed to have rejected the plan. holder of Class 8 interests will not receive cash or other property from the Debtor under the Plan. A full-text copy of the Debtor's disclosure statement is available for free at http://ResearchArchives.com/t/s?3003 A full-text copy ofthe Debtor's Chapter 11 plan of liquidation is available for free at http://ResearchArchives.com/t/s?3004 A full-text copy of the liquidation analysis is available for free at http://ResearchArchives.com/t/s?3005 About L.I.D Ltd. Headquartered in New York, L.I.D. Ltd., a jeweler, filed a chapter 11 petition on March 17, 2007 (Bankr. S.D. N.Y. Case No. 07-10725) Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen and Rochelle R. Weisburg, Esq., at Shiboleth, Yisraeli, Roberts & Zisman LLP represent the Debtor in its restructuring efforts. No case trustee, examiner, or official committee of unsecured creditors has been appointed in the case. When the Debtor sought protection from its creditors, it listed total assets of $157,784,935 and total debts of $143,867,465. LIFE UNIVERSITY BONDS: Moody's Rates Revenue Refunding Bonds Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Life University's Series 2008 Revenue and Revenue Refunding Bonds to be issued by the Development Authority of the City of Marietta. The rating outlook is stable. Moody's have also affirmed Moody's long term ratings on the prior Series 1995A and 1995B bonds, which will be refunded with the current issue. Use of Proceeds Refunding of Life University's Series 1995A and 1995B Revenue Bonds ($25.7 million), construction of a new 300 bed student housing facility with adjacent 600 car parking facility ($27.1 million) as well as other capital projects including a daycare center and student caf\'E9 ($15.7 million). Proceeds will fund a debt service reserve fund equal to maximum annual debt service as well as approximately $3 million of capitalized interest related to the new projects. Legal Security Gross revenue pledge, first mortgage pledge of University real property and debt service reserve fund. Other features include a rate covenant of 1.20 times and liquidity covenant of 80 days cash on hand beginning with the fiscal year ending June 30, 2009. There are none debt-related derivative instruments. Strengths -- Continued dramatic rebound in enrollment following sharp decline in 2003 related to accreditation issues. Student market position led by Doctor of Chiropractic program, which generated 82% of student tuition and fees in FY 2007. Annualized full-time equivalent enrollment for the 2007-2008 academic year was 1,827, 68% higher than the low of 1,087 in 2004-2005. Net tuition per student has grown markedly reaching $16,474 in FY 2007, up 34% from FY 2004. -- Increase in fiscal discipline as operating results covered debt service by 1.9 times in FY 2007 with a cash flow operating margin of 17.8%. The management team hired in spring 2004 and revitalized board continue with plans to grow revenues. -- Credit profile aided by mortgage pledge of property for the entire campus located in Marietta, 18 miles northwest of downtown Atlanta. An appraisal dated Oct. 1, 2007 established a market value of $61.8 million for the 110 acres campus and various improvements. -- New money from bond sale will help address some deferred maintenance, thereby likely enhancing the University's attractiveness to students. A majority of the new facilities are expected to generate additional revenue. Challenges -- With the majority of Life's students enrolled in its Chiropractic College, the University's market position remains narrowly focused as it recovers from accreditation issues; other undergraduate programs in wellness-related fields face significant competition from area public and private universities. As a specialty school, the University is vulnerable to flux in the demand for chiropractic education and related demand for chiropractic services. The University's revenue base remains somewhat small at $29 million in FY 2007, well below Moody's Baa median of $59 million for private universities. -- Limited balance sheet cushion supporting increased debt burden; $10.8 million of expendable financial resources provide limited financial flexibility relative to debt (0.15 times) and operations (0.38 times). Revenue growth will be crucial to the University's financial health, as peak debt service amounts to 20% of FY 2007 operating expenses. -- Limited fundraising record. Gift revenue has average $391,000 over the last three years, well below the $4.3 million raised in FY 2004 when the University's was under deep stress. While Life plans to hire new development staff members, there is a limited history of philanthropic support from its community of supporters. Donor support will be important in diversifying the University's highly concentrated revenue sources (student charges made up 94% of operating revenues in FY 2007) as well as achieving its various strategic initiatives. Market Position/Competitive Strategy: Tuition Driven University Highly Reliant on Demand for Chiropractic College; Enrollment Continues Rebound Following Accreditation Stress Moody's expect that Life University will remain highly dependent on demand for its core program in chiropractic education. Located just outside Atlanta in Marietta, Georgia, Life was founded in 1974 as the only chiropractic institution in the Southern region. Its enrollment rapidly grew to be the largest of any chiropractic college in the nation, with a strong market share of over 20%. >From its inception through the mid-1990's, Life benefited not only from its absence of regional competition from the 15 chiropractic colleges in other parts of the U.S., but also from a general growth in demand for chiropractic medicine and education. This was spurred in part by the growing availability of reimbursement for chiropractic treatment from health insurance providers. Beginning in about 1997, Life's chiropractic enrollment began to decline, in parallel with a broader national decline. The primary reasons for the drop are that the market finally reached a saturation point after many years of strong growth, and that students were choosing other careers with higher potential earnings power than chiropractic. Also, Life and other chiropractic colleges did not invest heavily in recruitment programs when their demand was robust, and have only recently made significant recruitment efforts in an attempt to rebuild the market. Driven by unfavorable publicity associated with accreditation and other issues, Life's enrollment began a rapid 65% decline in 2001, falling from 3,202 full-time equivalent students to 1,117 in 2004. In November 2005 the Commission on Accreditation of the Council on Chiropractic Education affirmed the accreditation of the Life University's doctor of chiropractic degree program, following a court-ordered review. In the prior year, the Southern Association of Colleges and Schools reaffirmed the University's accreditation, ending a two-year probationary period. Moody's believe University officials are now actively engaged in maintaining an open and healthy dialogue with its accrediting entities. Litigation around the accreditation issues has also been resolved. A new management team began in 2004, who along with a revitalized board, has achieved a dramatic rebound following the sharp decline in enrollment. Full-time equivalent enrollment of 1,827 in the 2007-2008 academic year, was up 68% from 2004-2005 in what has been a steep rebound. Currently 70% of Life's 1,947 students are enrolled in its Doctor of Chiropractic (DC) program, but because of net tuition differences in the undergraduate (25% of headcount enrollment) and graduate (4% of headcount enrollment) program revenues, they make up 82% of tuition charges. Ongoing attempts to diversify enrollment through growth in undergraduate and other graduate programs have achieved limited success to date, due in part to limited marketing history and strong local competition from other providers, such as public and private universities in the Atlanta area. The University is in the process of an Academic Master Plan which will, among other items, explore potential areas of market opportunity for undergraduate and other graduate programs which should enjoy some benefit from ongoing growth in the college age population in the Atlanta metropolitan area. Application volume for the DC program has remained on a steady climb over the last 5 years, reaching 760 applications last academic year, up 74% from two years prior. Life accepted 55% of its DC applicants and yielded 43% of admitted students. Life has a quarterly academic calendar and admits students to its various programs each quarter. DC program tuition and fees for the past academic year were $18,945 assuming enrollment in three 12-hour quarters. Net tuition per student has been increasing and grew 3% in FY 2007 to $16,474. With improved selectivity and renewed focus on academic quality, Life's DC students have been performing materially better on the licensure exams conducted by the National Board of Chiropractic Examiners. The pass rate for NBCE Part I exam, for example, improved 22% to 78% in the two-year periods before and after November 2005. The University's revenue growth plans remain largely dependent on attracting more students to its DC and other programs, with budgeted increases in FY 2009 average headcount enrollment to 2,125 from 1,907 in the prior academic year. Life's ability to achieve growth and longer term stability in the DC program is partially dependent on the demand for chiropractic service and the expected quality of life for prospective chiropractic professionals. While the U.S. Department of Labor's "Occupational Outlook Handbook" projects 14% increase in number of employed Chiropractors between 2006 and 2016, there are a number of threats to that outlook. Those challenges include the willingness for insurers and managed care providers to provide coverage for a full-scope of chiropractic services as well as the ability of the profession to respond to evolving demands for evidence-based medicine and quality patient-centered healthcare. Operating Performance: Return to Strong Cash Flow Margins Following Huge Deficits in FY 2002 and 2003 Life's new management team has demonstrated a clear ability to generate positive operating cash flow results in the face of material obstacles. Moody's calculation of operating cash flow has averaged 16.4% between fiscal years 2005 and 2007, supporting average debt service coverage of 1.6 times. Preliminary results for the first 11 months of FY 2008 show similar net results. Moody's calculation of operating margin for FY 2007 was 1.9% on adjusted revenues of $28.9 million. While revenues have grown from their low of $16.5 million in FY 2004, they have not recovered to their FY 2000 level of $46.4 million. Future positive performance will be dependent on revenue growth, especially in light of the increased debt service burden from the current borrowing and a recent period of increased payroll expenses as the University concludes a multi-year plan to ensure faculty and staff salaries did not remain below market rate. Maximum annual debt service equates to 20% of FY 2007 operating expenses, well above Moody's 6% median for Baa-rated private universities. A majority of the new facilities are expected to generate additional revenues, including the housing facilities which will replace some dated apartments, a caf\'E9, a parking facility and daycare center. Revenues at Life have extremely limited diversity with student charges making up 93.5% of Moody's adjusted revenues. Others revenue contributors includes investment income at 2%, gifts at 1% and patient care services at 1%. Balance Sheet Position: Thin Resource Levels Relative to Pro Forma Debt and Operations Since falling by two-thirds earlier in this decade Life's total financial resources of $11.9 million at the end of FY 2007 have been essentially flat for four years. Positive cash flow has been used to make limited but needed investments in the physical plant to remain competitive. With little record in philanthropy, 76% of $9.1 million of the total resources are unrestricted. Expendable financial resources at the end of FY 2007 cover pro forma debt by 0.15 times and cover about 4.5 months of operating expenses. With its thin resource levels, Life has been conservative in investment management, with assets beyond working cash held in a laddered portfolio of certificates of deposit at insured banks. Increasing financial resource levels would provide upward rating pressure, especially if sourced from a healthy mix of philanthropy and retained operating surpluses. While Life had a strong fundraising year in FY 2004 ($4.3 million in total gift revenue) during the midst of its enrollment decline, gift flow slowed afterwards and has averaged $391,000 per year and totaled $185,000 in FY 2007. The University reports some progress in selecting a new development director who will be charged with increasing donor support. Bondholders enjoy a mortgage pledge on the real assets of the University which Moody's believes would likely materially reduce expected loss in the event of default. An appraisal report as of Oct. 1, 2007, which does not include the planned improvements, places the value of the 110-acre campus and its existing improvements at $61.8 million. Outlook Moody's stable outlook reflects Moody's expectations of continued balanced operations, steady rebuilding of enrollment revenues and completion of the planned projects on time and on budget. What Could Change the Rating UP Consistently balanced operating performance, revenue growth, and an increase in revenue diversity, including diversity of tuition revenue; material financial resource growth and limited additional debt. What Could Change the Rating DOWN Enrollment losses leading to further financial instability; weakening of financial resource levels or operating performance. Key Data and Ratios (Fiscal 2007 financial data; fall 2007 enrollment data): -- Total enrollment: 1,827 full-time equivalent students -- Total pro forma debt: $70.6 million -- Expendable financial resources: $10.8 million -- Expendable resources to pro forma debt: 0.15 times -- Expendable Resources to Operations: 0.38 times -- Net Tuition per Student: $16,474 -- Average Operating Margin (3 years): -1.5% -- 2007 Operating Margin: 1.9% -- Average actual debt service coverage: 1.9 times Rated Debt -- Series 2008: Ba3 -- Series 1995A and B (to be refunded): Ba3; insured by FSA (FSA's current financial strength rating is Aaa under review for possible downgrade) MAGNA ENTERTAINMENT: Completes Sale of Great Lakes Downs -------------------------------------------------------- Magna Entertainment Corp. has completed the sale of Great Lakes Downs to The Little River Band of Ottawa Indians for $5.0 million cash less customary closing adjustments. Great Lakes Downs, situated on approximately 85 acres in Muskegon, Michigan, was a racetrack which the company had previously closed in November 2007. The net sale proceeds of approximately $4.5 million have been used to partially repay the company's bridge loan with a subsidiary of MI Developments Inc., the company's controlling shareholder. About Magna Entertainment Headquartered in Aurora, Ontario, Magna Entertainment Corp. (Nasdaq: MECA)(TSX: MEC.A) -- http://www.magnaentertainment.com/ -- acquires, develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. The company also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. At March 31, 2008, the company's consolidated balance sheet showed $1.2 billion in total assets, $914.9 million in total liabilities, and $318.2 million in total stockholders' equity. * * * As reported in the Troubled Company Reporter on March 20, 2008, Ernst & Young LLP in Toronto, Canada, expressed substantial doubt about Magna Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. MATTRESS HOLDINGS: Moody's Cuts Corporate Family Rating to B3 ------------------------------------------------------------- Moody's Investors Service downgraded Mattress Holdings Corp.'s debt ratings, including the Corporate Family Rating and Probability of Default Rating to B3 from B2, and the ratings on the senior secured credit facilities to B2 from B1. The rating outlook is negative. The downgrades reflect the company's weak credit metrics, negative comparable store sales trend, and tight covenant headroom. This weaker-than-expected performance is being driven by the soft economic environment in the U.S., as increased gasoline prices and a weaker housing environment is reducing overall consumer confidence and spending. Free cash flow is negative due to weaker earnings and aggressive spending on new store openings. As a result, financial leverage has increased with Debt/EBITDA rising to 7.5x and interest coverage falling to 1.1x. Moody's remains concerned that the weak economic trend will continue, and material improvement in the company's performance and credit metrics over the next 12 months will be limited. The negative outlook reflects Moody's expectation for continued- weak economic conditions over the next year, and concern for limited cushion under the company's financial covenants, which contractually tighten several times over the next 12 months. The ratings would be downgraded should operating performance continue to weaken beyond expectations, resulting in further erosion in EBITDA, negative cash flow or covenant violations. Given the negative outlook, an upgrade is unlikely in the near term. Over the longer term, an upgrade would require sustained improvement in operating performance, a return to positive free cash flow generation, and improved covenant headroom. These ratings have been downgraded: -- Corporate family rating to B3 from B2; -- Probability of Default rating to B3 from B2. -- Senior secured credit facilities at to B2 (LGD3-33%) from B1 (LGD3-35%) Headquartered in Houston, Texas, Mattress Holdings Corp. is a leading specialty retailer of conventional and specialty mattresses. The company operates 406 company owned stores and 54 franchised stores in 19 states. Revenues for the LTM period ended April 29, 2008 are estimated to exceed $460 million. MAXXAM INC: Inks Agreement with PBGC on PALCO Pension Plan ---------------------------------------------------------- Maxxam Inc. and The Pension Benefit Guaranty Corporation entered into an agreement on July 10, 2008, pursuant to which the company essentially agreed, among other things, that should the PBGC elect to terminate The Pacific Lumber Company Pension Plan in the future, the company would continue to be liable for any unfunded obligations then outstanding with respect to the Plan. If such a termination was to be initiated, the company expects it would first take actions to assume sponsorship of the Palco Pension Plan in order to avoid such termination. Palco is an an indirect wholly owned subsidiary of the company. On Jan. 18, 2007, Palco and its subsidiaries, including Scotia Pacific Company LLC (Scopac), filed separate voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The PBGC Agreement terminates on the earliest of (i) the fifth anniversary of the effective date of the agreement, (ii) the date the Palco Pension Plan is assumed by the company, (iii) the date the Palco Pension Plan is terminated under certain standard termination procedures set forth in the Employee Retirement Income Security Act of 1974 (ERISA), or (iv) the date the Palco Pension Plan is properly merged into another plan in accordance with ERISA and the Internal Revenue Code. The company has previously disclosed that, under ERISA, if Palco's pension plan were to be terminated under certain circumstances, the company would be jointly and severally liable for any unfunded obligations with respect to the Palco Pension Plan. The plan of reorganization proposed by Mendocino Redwood Company and Palco's principal creditor, Marathon Structured Finance Fund L.P., in Palco, Scopac and Palco's other subsidiaries' bankruptcy cases, includes a provision pursuant to which the Palco Pension Plan would be assumed by the entity that would succeed the Debtors under the MRC/Marathon Plan. The MRC/Marathon Plan, the first of two plans of reorganization filed on the Jan. 30, 2008 deadline, would reorganize and continue the businesses of the Debtors. The second, which was a plan proposed on behalf of the holders of Scopac's $713.8 million principal amount (as of Dec. 31, 2006) of Timber Collateralized Notes, provides for an auction of Scopac's timberlands to the highest bidder. As reported by the Troubled Company Reporter on July 11, 2008, the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, confirmed on July 8, 2008, the Modified First Amended Joint Plan of Reorganization With Technical Modifications for the Debtors proposed by Marathon, Mendocino, and the Official Committee of Unsecured Creditors. Judge Richard Schmidt concluded that the Marathon/Mendocino Plan is compliant in all respects with the statutory requirements under Section 1129 of the Bankruptcy Code. A full-text copy of the Agreement dated July 10, 2008, between the PBGC and the company, is available for free at: http://researcharchives.com/t/s?2ff6 About MAXXAM Inc. Headquartered in Houston, MAXXAM Inc. (AMEX: MXM) is a publicly- traded company, with business interests in three industries: forest products, real estate investment and development and racing operations. As reported in the Troubled Company Reporter on May 19, 2008, MAXXAM Inc.'s consolidated balance sheet at March 31, 2008, showed $483.5 million in total assets and $779.6 million in total liabilities, resulting in a $296.1 million total stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on May 9, 2008, Deloitte & Touche LLP, in Houston, expressed substantial doubt about MAXXAM Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the uncertainty surrounding the ultimate outcome of the separate voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code filed by certain of the company's wholly owned subsidiaries, and its effect on the company, as well as the company's operating losses at its remaining subsidiaries. MCCLATCHY CO: Revenue Pressures Cue Fitch to Cut IDR to B+ from BB ------------------------------------------------------------------ Fitch Ratings has taken these rating actions on the Issuer Default Rating and outstanding debt ratings of The McClatchy Company: -- IDR downgraded to 'B+' from 'BB'; -- Senior unsecured notes/debentures downgraded to 'B/RR5' from 'BB'; -- Senior unsecured credit facility affirmed at 'BB+/RR1'; -- Senior unsecured term loan affirmed at 'BB+/RR1'. Fitch has also assigned an 'RR5' Recovery Rating to MNI's senior unsecured notes and an 'RR1' to MNI's bank debt. The Rating Outlook remains Negative. Approximately $2.1 billion of debt is affected by this action. The downgrade and Negative Outlook reflect the continued top-line revenue pressure and resulting decline in EBITDA. As of the last twelve months ending June 30, 2008, revenues have declined a total of 11.8% (14.7% on a year to date comparison), with significant declines in nearly all the print advertising categories. Real estate and employment classified revenues have had the sharpest declines down 34.7% and 33.6%, respectively. Over the longer term Fitch continues to anticipate that MNI will be challenged to generate meaningful and consistent revenue growth and remains cautious regarding newspaper companies' prospects for capturing and monetizing the significant volume of advertising dollars that are migrating toward the Internet. Fitch remains conscious that there is limited visibility regarding the likelihood, timeframe and magnitude of a potential reversal of these negative trends. LTM June 30, 2008 online growth of 7.5% has not been sufficient to make up for the accelerating declines in print advertising revenues. While MNI continues to be successful in reducing costs, (they announced a reduction in headcount of 1,400 and partnerships with other newspapers to reduce print cost), these cost reductions have not yet been able to compensate for the revenue pressures. EBITDA margins continue to decline from 27% at year-end 2006 to 25.7% at YE 2007 and down to 23.7% for June 30, 2008 LTM. While still generally comfortable with MNI's willingness to repay debt, this weakening of EBITDA and free cash flow has hindered the company's ability to meaningfully reduce leverage with free cash flow going forward. Fitch notes that MNI announced that the board of directors will discuss the dividend policy (approximately $60 million in dividend were paid in 2007). The $2.1 billion in total debt is comprised of approximately $1 billion in bank term loans and revolver balances and $1.1 billion in notes/debentures (assumed as part of the KRI transaction). This is after the reduction of $300 in bonds through its bond tender offer and using proceeds from the sale of SP Newsprint and a tax refund. Leverage as measured by debt-to- EBITDA, was 4.2 times (4.5x if the restructuring charges of $23.3 million are not added back to calculate EBITDA). The RR and notching reflect Fitch recovery expectations under a distressed scenario. The 'RR1' rating for MNI's unsecured bank credit facility reflects Fitch's belief that 91%-100% recovery is realistic given that it benefits from an unsecured guarantee from material operating subsidiaries and sufficient estimated enterprise value in a distress scenario. The 'RR5' recovery rating for the senior unsecured notes and one notch differential from the IDR reflects that 11% to 30% recovery is reasonable due to its position in the capital structure. Under the March 28, 2008 amendment, the credit facility was reduced by $250 million, from its original capacity of $1 billion. In May 2008, it was further reduced by $125 million, as a result of the tax refund received due to the sale of the Minneapolis Star Tribune. The amendment also included a condition that upon the closing and receipt of the proceeds from the Miami Property sale, the credit facility will be reduced by an additional $125 million, resulting in a total revolving credit facility of $500 million. MNI also amended its financial covenant ratios on March 28, 2008, providing covenant and step down relief, in exchange for a decrease in the size of the revolving credit facility and increased pricing. The financial leverage covenant will remain at 5.0x total debt LTM EBITDA through Sept. 27, 2009; it will then step down to 4.75x from Dec. 27, 2009 through Dec. 26, 2010 and down to 4.5x after Dec. 26, 2010. The interest coverage ratio step up from 2.75x to 3.0x starting on Dec. 28, 2008 was also removed. Fitch calculates that interest coverage is approximately 2.9x as of LTM March 30, 2008. Given that there is limited room under these covenants and the continued pressures on EBITDA, MNI stated it would monitor its financial position and may seek further amendments. Although management has stated its good relationships with its banks, Fitch remains cautious regarding companies that may need to renegotiate with lenders in this environment. MERRILL LYNCH: Moody's Puts Low-B Ratings on Series 2000-Canada 3 ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of two class and affirmed seven classes of Merrill Lynch Mortgage Loans Inc., Commercial Mortgage Pass-Through Certificates, Series 2000-Canada 3 as: -- Class A-1, $1,549,893, affirmed at Aaa -- Class A-2, $131,400,000, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $7,727,000, affirmed at Aaa -- Class C, $8,372,000, affirmed at Aaa -- Class D, $10,304,000, upgraded to A1 from A2 -- Class E, $2,576,000, upgraded to Baal from Baa2 -- Class F, $7,084,000, affirmed at Ba2 -- Class G, $5,151,000, affirmed at B2 Moody's upgraded Classes D and E due to increased defeasance and credit subordination as well as overall improved pool performance. As of the July 15, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 30.4% to $179.3 million from $257.6 million at securitization. The Certificates are collateralized by 37 mortgage loans ranging in size from less than 1.0% to 8.4% of the pool, with the top 10 loans representing 49.6% of the pool. Ten loans, representing 23.8% of the pool, have defeased and are collateralized with Canadian Government securities. One loan has been liquidated from the pool resulting in a minimal loss. Currently there are no loans in special servicing. One loan, representing 5.1% of the pool, is on the master servicer's watchlist. Moody's was provided with partial or full year 2007 financials for 71.0% of the pool. Moody's loan to value (LTV) ratio is 57.2% compared to 60.5% at Moody's last full review in February 2007 and 73.4% at securitization. The top three non-defeased loans represent 22.2% of the pool. The largest loan is the Woodside Square Shopping Center Loan ($15.0 million--8.4%), which is secured by a 291,000 square foot retail center located in Scarborough, Ontario. The largest tenants are Food Basics (14.2% GLA; lease expiration August 2023) and The Best Buys (9.2%; month-to-month lease since April 2007). As of January 2008, the center was 95.7% occupied compared to 86.9% at last review. Moody's LTV is 55.2% compared to 64.7% at last review. The second largest loan is the Somerset House Loan ($14.5 million--8.1%), which is secured by a 138 unit healthcare property located in Victoria, British Columbia. The tenancy is 100% private pay. Moody's LTV is 74.4% compared to 74.9% at last review. The third largest loan is the Delta St. John's Loan ($10.3 million--5.8%), which is secured by a 276 room hotel located in St. John's, Newfoundland. RevPAR for calendar year 2007 was $96.00 compared to $75.10 at securitization. The loan has amortized 17.3% since securitization. Moody's LTV is 57.7%, compared to 61.1% at last review. MERRILL LYNCH: Moody's Puts Low-B Ratings on Six Classes of Certs. ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Merrill Lynch Mortgage Trust 2005-MCP1, Commercial Mortgage Pass-Through Certificates, Series 2005-MCP1 as: -- Class A-1, $11,806,846, affirmed at Aaa -- Class A-1A, $125,150,167, affirmed at Aaa -- Class A-2, $346,500,000, affirmed at Aaa -- Class A-3, $47,661,000, affirmed at Aaa -- Class A-4, $526,039,000, affirmed at Aaa -- Class A-SB, $100,000,000, affirmed at Aaa -- Class AM, $173,800,000, affirmed at Aaa -- Class A-J, $115,142,000, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class XP, Notional, affirmed at Aaa -- Class B, $36,932,000, affirmed at Aa2 -- Class C, $15,208,000, affirmed at Aa3 -- Class D, $32,587,000, affirmed at A2 -- Class E, $19,553,000, affirmed at A3 -- Class F, $28,242,000, affirmed at Baa1 -- Class G, $17,380,000, affirmed at Baa2 -- Class H, $21,725,000, affirmed at Baa3 -- Class J, $6,518,000, affirmed at Ba1 -- Class K, $8,690,000, affirmed at Ba2 -- Class L, $6,517,000, affirmed at Ba3 -- Class M, $4,345,000, affirmed at B1 -- Class N, $4,345,000, affirmed at B2 -- Class P, $8,690,000, affirmed at B3 Moody's affirmed the ratings based on overall stable pool performance. As of the July 14, 2008 distribution date the transaction's aggregate certificate balance has decreased by approximately 3.4% to $1.68 billion from $1.73 billion at securitization. The Certificates are collateralized by 109 loans, ranging in size from less than 1.0% to 11.9% of the pool, with the top 10 loans representing 46.7% of the pool. The pool includes three loans with investment grade underlying ratings, representing 15.3% of the pool. Four loans, representing 3.9% of the pool, have defeased and are collateralized by U.S. Government securities. The pool has not realized any losses since securitization. Currently there are three loans in special servicing, representing 5.8% of the pool. The largest specially serviced loan is the HAS Industrial Portfolio Loan ($62.2 million--3.7%), which is secured by 10 industrial properties located in Ohio. This loan was transferred to special servicing in July, 2008 due to a payment default. Moody's has not yet determined a loss estimate for this loan, but has estimated an aggregate loss of approximately $300,000 for the other specially serviced loans. Thirty loans, representing 17.2% of the pool, are on the master servicer's watchlist. The master servicer's watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association's monthly reporting package. As part of our ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Not all loans on the watchlist are delinquent or have significant issues. Moody's was provided with partial or full-year 2007 operating results for 65.9% of the pool. Moody's weighted average loan to value (LTV) ratio for the conduit component is 99.0% compared to 100.3% at Moody's last full review in July 2007 and 100.9% at securitization. The largest loan with an underlying rating is the Westchester Mall Loan ($200.0 million--11.9%), which is a pari passu interest in a $300.0 million mortgage secured by the borrower's interest in an 832,000 square foot regional mall. The mall is located in White Plains, New York and is anchored by Nordstrom and Neiman Marcus. The in-line space was 94.8% occupied as of December 2007, the same as at last review. The property's cash flow has increased 4.5% since last review. Moody's current underlying rating is A2 compared to A3 at last review. The second largest loan with an underlying rating is the Tharaldson Hotel Pool B Loan ($31.7 million--1.9%), which is secured by 10 limited service hotels totaling 853 rooms. The properties are located in five states with concentrations in Texas (47.0%), Illinois (17.0%) and Missouri (16.0%). The portfolio's financial performance has improved since last review and the loan has benefited from amortization. The loan was structured with a 20-year amortization and has amortized by approximately 9.1% since securitization. Moody's current underlying rating is A2 compared to A3 at last review. The third largest loan with an underlying rating is the Tharaldson Hotel Pool A Loan ($22.7 million--1.4%), which is secured by 10 limited service hotels totaling 726 rooms and the fee leased fee interests in three hotels. The properties are located in eight states with concentrations in Arizona (18.0%), Illinois (17.0%) and Oklahoma (16.0%). The portfolio's financial performance has improved since last review and the loan has benefited from amortization. The loan was structured with a 20-year amortization and has amortized by approximately 9.1% since securitization. Moody's current underlying rating is A2 compared to A3 at last review. The top three conduit loans represent 17.9% of the pool. The largest conduit loan is the 711 Third Avenue Loan ($120.0 million--7.1%), which is secured by a 551,000 square foot Class B office building located in New York City. The property was 94.6% occupied as of December 2007 compared to 100.0% at last review. The largest tenants are Ketchum, Inc. (18.3% NRA; lease expiration November 2015), Crain Communication (16.4%; lease expiration February 2009) and Parade Publications (14.9%; lease expiration August 2010). Moody's LTV is 112.1% compared to 116.4% at last review. The second largest conduit loan is the Queen Ka'ahumanu Center Loan ($92.0 million--5.5%), which is secured by the borrower's interest in a 556,000 square foot regional mall located in Kahulia, Hawaii. The collateral also includes a 16,500 square foot office building adjacent to the mall. The mall is anchored by two Macy's stores and Sears. The in-line space was 96.8% occupied as of December 2007 compared to 80.6% at last review. Performance has improved due to increased occupancy. Moody's LTV is 93.2% compared to 113.6% at last review. The third largest conduit loan is the ACP Woodland Park I Loan ($88.5 million--5.3%), which is secured by three office buildings located in Herndon, Virginia. The complex totals 479,000 square feet and was 98.2% occupied as of December 2007 compared to 95.0% at last review. Moody's LTV is 98.3% compared to 100.1% at last review. MICHAEL ASHE: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Michael J. Ashe 23 Bulow Road Hingham, MA 02043 Bankruptcy Case No.: 08-15419 Chapter 11 Petition Date: July 24, 2008 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Timothy M. Mauser, Esq. Email: tmauser@dwboston.com Deutsch Williams Brooks DeRensis & Holland, P.C. One Design Center Place, Suite 600 Boston, MA 02210 Tel: (617) 951-2300 Fax: (617) 951-2323 http://dwboston.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mab08-15419.pdf MILLENNIUM INSTITUTE: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Millennium Institute for ANC Inc. Suite 112 MCS 404 San Juan, PR 00936 Bankruptcy Case No.: 08-04767 Chapter 11 Petition Date: July 24, 2008 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Andres Garcia Arregui, Esq. (garciarr@prtc.net) Garcia Arregui & Fullana 252 Ponce de Leon Avenue Suite 1101 San Juan, PR 00918 Tel: (787) 766-2530 Fax: (787) 756-7800 Total Assets: $3,927,851 Total Debts: $5,515,869 Debtor's list of its 19 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco Popular Bank Loan $3,821,866 P.O. Box 364527 Secured: San Juan, PR 00936-4527 $3,165,188 Unsecured: $656,678 Miradero Capital Trade Debt $500,000 Union Plaza, Suite 1500 Avenue Ponce de Leon 416 San Juan, PR 00918 Internal Revenue Service $113,186 Department of the Treasury Philadelphia, PA 19154-0039 Dr. Nestor A. Perez Bank Loan $100,000 Autoridad Energia Electrica Trade Debt $57,291 Departamento Hacienda $86,536 Farmacia Summit Hill Bank Loan $50,094 Internal Revenue Service $42,011 Fondo Seguro del Estado $36,815 Excellent Cleaning Group Bank Loan $29,995 Medics Trade Debt $29,955 Drug Unlimited Inc. Trade Debt $29,227 Cadillac Uniforms Trade Debt $27,774 ERGA/C Contractors Trade Debt $26,319 Laida Pla Trade Debt $23,760 Crim $22,598 Policia Privada Trade Debt $22,435 Sanofi-Adventis Trade Debt $21,030 1983-01 Corp. Trade Debt $20,043 MIURA 2004-1: Fitch Junks Ratings on Three Classes of Notes ----------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative three classes of notes issued by MIURA 2004-1, effective immediately: -- $37,000,000 class A to 'CC' from 'AAA'; -- $43,000,000 class B to 'CC' from 'AA-'; -- $20,000,000 class C to 'CC' from 'A-'. MIURA is a partially funded, synthetic collateralized debt obligation that originally closed on Sept. 28, 2004. As of the trustee report dated June 23, 2008, approximately 32% of the portfolio was comprised of pre-2005 vintage U.S. structured finance CDOs, 54.8% consisted of pre-2005 vintage U.S. CLOs and corporate CDOs, and 11.5% consisted of pre-2005 vintage U.S. subprime RMBS. The remaining portion of the portfolio (1.5%) consisted of other vintage SF CDOs and real estate CDOs. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically with regard to the SF CDOs. Since the review in December 2006, approximately 11% of the portfolio has been downgraded to ratings of 'CCC+' or lower, and approximately 5.7% is now rated 'CC' or lower, which is equivalent to the credit enhancement provided to the class A notes. The rated notes are expected to continue to receive interest payments, however, the likelihood of principal losses are now consistent with 'CC' credit risk. The ratings of the notes address the timely receipt of scheduled interest payments and the ultimate receipt of principal as per the transaction's governing documents. MODERN CONTINENTAL: Taps Hinckley Allen as Special Counsel ---------------------------------------------------------- Modern Continental Construction Co. seeks permission from the U.S. Bankruptcy Court for the District of Massachusetts to employ Hinckley, Allen & Snyder LLP as its special counsel. Hinckley Allen will, among others, prosecute certain litigation currently pending before various state and federal courts both in the Commonwealth of Massachusetts and in other jurisdictions, advise on general corporate, employment, and criminal matters. Documents submitted to the Court did not specify the firm's hourly rates. Paul F. O'Donnell, III, Esq., a partner at Hinckley Allen, assures the Court that the firm does not represent any interest adverse to the Debtor's estates. Modern Continental Construction Co. -- http://www.moderncontinental.com/-- of Cambridge, Massachusetts was established in 1967 when its founders, Lelio "Les" Marino and Kenneth Anderson, earned a small contract for the construction of a sidewalk in the town of Peabody. Since then, the company has blossomed into a multi-faceted organization which is highly respected throughout the construction industry, and is ranked among the top contractors in the country. The company filed for Chapter protection on June 23, 2008 (Bankr. D. Mass. Case No. 08-14558). Harold B. Murphy, Esq., at Hanify & King P.C., represents the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy case. When the debtor filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1 billion. MODERN CONTINENTAL: Taps UHY Advisors as Financial Advisor ---------------------------------------------------------- Modern Continental Construction Co. seeks permission from the U.S. Bankruptcy Court for the District of Massachusetts to employ UHY Advisors N.E. LLC as its financial advisor. UHY Advisors will, among others, assist the Debtor and its counsel with respect to the development of a plan of reorganization and disclosure statement, and coordinate the preparation of schedules of assets and liabilities, monthly operating reports, and other financial information. Roger Tougas, a principal at UHY Advisors, tells the Court that the firm's professionals bill: Standard Rate Discounted Rate ------------- --------------- Managing Director $385 $345 Principal $350 $315 Senior Manager $275 $245 Manager $225 $200 Senior Staff $185 $165 Staff $135 $120 Bookkeeper $100 $90 Mr. Tougas assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. About Modern Continental Modern Continental Construction Co. -- http://www.moderncontinental.com/-- of Cambridge, Massachusetts was established in 1967 when its founders, Lelio "Les" Marino and Kenneth Anderson, earned a small contract for the construction of a sidewalk in the town of Peabody. Since then, the company has blossomed into a multi-faceted organization which is highly respected throughout the construction industry, and is ranked among the top contractors in the country. The company filed for Chapter protection on June 23, 2008 (Bankr. D. Mass. Case No. 08-14558). Harold B. Murphy, Esq., at Hanify & King P.C., represents the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy case. When the debtor filed for protection from its creditors, it listed assets of $100 million to $500 million, and debts of $500 million to $1 billion. MORGAN STANLEY CAPITAL: S&P Holds Low-B Ratings on Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 21 classes of commercial mortgage pass-through certificates from Morgan Stanley Capital I Trust 2005-TOP17. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the July 13, 2008, remittance report, the collateral pool consisted of 110 loans with an aggregate trust balance of $951.6 million, compared with the 110 loans totaling $980.8 million at issuance. The master servicer, Wells Fargo Bank N.A., reported financial information for 99.6% of the pool. Seventy-six percent of the servicer-provided information was full- year 2007 data. Excluding the defeased loans ($74.4 million, 7.8%), Standard & Poor's calculated a weighted average debt service coverage of 2.34x for the pool, up from 2.20x at issuance. None of the loans in the pool are currently with the special servicer or delinquent, and the trust has experienced no losses to date. The top 10 loans have an aggregate outstanding balance of $414.9 million (43.6%) and a weighted average DSC of 2.64x, up from 2.52x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. All of the properties were characterized as "good" or "excellent." The credit characteristics of the Wells REF portfolio, the Towers Crescent, The Maritime Hotel, the 101 Ash Street, the International Plaza, and the Bon Aire Apartment loans are consistent with those of investment-grade obligations. The credit characteristics of the Travis Tower loan and the Azalea Square loan are no longer consistent with those of an investment-grade obligation. Details of the three largest of these loans, as well as the Azalea Square loan are: -- The Wells REF portfolio is the largest exposure in the pool and has a trust balance of $80.0 million (8%) and a whole-loan balance of $350.0 million. The whole loan consists of three pari passu notes: an $80.0 million A-2 note serves as trust collateral, a $125.0 million A-1 note is included in the Morgan Stanley Capital I Trust 2004-HQ4 transaction, and a $145.0 million A-3 note is included in the Morgan Stanley Capital I Trust 2005-HQ5 transaction. The whole loan is secured by nine class A office properties totaling 2.9 million sq. ft. located in five states and the District of Columbia. The servicer reported a DSC of 3.71x for the exposure at year-end 2007, up from 3.55x at issuance. As of January 2008, the portfolio's occupancy was 100%, unchanged from issuance. Standard & Poor's adjusted net cash flow for this exposure is comparable to its level at issuance. -- The Towers Crescent loan is the fourth-largest exposure in the pool and has a trust and whole-loan balance of $36.6 million (3.8%). The loan is secured by the fee interest in two office buildings totaling a 288,248 sq. ft. in the Tysons Corner area of Vienna, Virginia. For the year-ended Dec. 31, 2007, the DSC for this loan was 2.94x and the occupancy was 95%. Standard & Poor's adjusted value for this loan is up 30% from its level at issuance. -- The Travis Tower loan is the fifth-largest exposure in the pool and has a trust and whole-loan balance of $35.8 million (3.8%). The loan is secured by the fee interest in a 507,247-sq.-ft. office building in downtown Houston, Texas. For the year ended Dec. 31, 2007, DSC was 1.95x and the occupancy was 94%. The loan appears on the watchlist because of the pending lease expiration of Centerpoint Energy Inc. (BBB/Stable/A-2), which occupies 55% of the property. Standard & Poor's analysis assumed that Centerpoint Energy will vacate the property when its lease expires on Sept. 31, 2008. Standard & Poor's considered market data during its analysis and arrived at a stabilized value for the property that was 35% less than at issuance. -- The Azalea Square loan, ninth-largest exposure in the pool, has a balance of $16.5 million (1.7%) and is secured by the fee interest in a 181,942-sq.-ft. anchored retail community shopping center in Summerville, South Carolina. For the year-ended Dec. 31, 2007, the DSC was 2.39x and occupancy was 98%. Standard & Poor's adjusted NCF for this exposure is down slightly from issuance, reflecting higher operating expenses. Wells Fargo reported a watchlist of five loans ($55.1 million, 5.8%). Travis Tower, which is described above, is the largest loan on the watchlist. Bally Plaza ($7.4 million, 0.8%) is the second-largest loan on the watchlist. This loan is secured by 212,260-sq.-ft. of retail-anchored property in Colorado Springs, Colorado. The loan appears on the watchlist because Bally's Total Fitness, which occupies 14% of the property, has filed for bankruptcy. To date, Bally's has not rejected the lease and is still operating in the space. 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 affirmed ratings. Ratings Affirmed Morgan Stanley Capital I Trust 2005-TOP17 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-2 AAA 17.52% A-3 AAA 17.52% A-4 AAA 17.52% A-AB AAA 17.52% A-5 AAA 17.52% A-J AAA 9.66% B AA 7.47% C AA- 6.70% D A 5.54% E A- 4.51% F BBB+ 3.86% G BBB 3.09% H BBB- 2.32% J BB+ 2.06% K BB 1.67% L BB- 1.29% M B+ 1.16% N B 1.03% O B- 0.77% X-1 AAA N/A X-2 AAA N/A N/A -- Not applicable. NATIONAL CITY: Posts $1.8BB Net Loss for Second Quarter of 2008 --------------------------------------------------------------- National City Corporation reported a net loss for the second quarter of 2008 of $1.8 billion, compared to a net loss of $171 million in the first quarter of 2008, and net income of $347 million in the second quarter a year ago. The net loss was $1.9 billion for the first half of 2008 compared to net income of $666 million in the first half of 2007. The quarter and year-to-date loss was mainly driven by actions to increase loss reserves on liquidating mortgage loan portfolios and a non-cash goodwill impairment charge of $1.1 billion related to previous acquisitions. The second quarter provision for loan losses was $1.6 billion, of which $1.0 billion pertained to liquidating portfolios of brokered home equity, nonprime mortgage, and construction loans to individuals. The second quarter provision for loan losses included supplemental reserves of $478 million, specifically reflecting the difficult environment in the housing market. Excluding unusual and non-operating items, pre-tax pre-provision operating earnings were $610 million in the second quarter of 2008, up 19% from $512 million in the first quarter of 2008. Net charge-offs of $740 million were predominantly in the liquidating portfolios and were less than half of the second quarter provision, resulting in a significant increase in the allowance for loan losses to 3.03% of portfolio loans. While the goodwill charge increased the reported net loss for the period, it had no effect on tangible equity, regulatory capital, or liquidity. As of June 30, 2008, the Tier 1 risk-based capital ratio was approximately 11.08%, up from 6.67% at March 31, 2008 and significantly in excess of the well-capitalized minimum of 6%. Total risk-based capital was approximately 14.90% and tangible equity to assets was approximately 8.94% at June 30, 2008. Consolidated net (loss)/income, measured in accordance with GAAP, is the principal and most useful measure of earnings and provides comparability of earnings with other companies. However, management believes presenting pre-tax pre-provision operating earnings provides investors with the ability to understand the company's underlying operating trends. Chairman Reiterates Status as Best Capitalized Bank Chairman, President and CEO Peter E. Raskind commented, "In this very challenging environment, we have made significant progress during the quarter in strengthening our balance sheet, mitigating losses in our liquidating portfolios and positioning National City for long-term growth when the credit cycle turns. With the completion of our $7 billion capital raise, National City is by far the best capitalized bank among its peer group -- and is the best capitalized of all major U.S. banks. We continue to generate strong pre-provision income, and we are confident that we have more than sufficient capital to ride out turbulent credit markets. We fully recognize that we need to improve performance. Our management team is aggressively executing on plans to manage risk, cut expenses, and improve profitability. We are sharpening our focus on our core businesses while continuing to serve customers as one of the leading banks in our region. We believe that the fundamental strengths of our business model will help drive a return to profitability. As we continue to work through the current credit market turbulence, we are building our core business through profitable relationship growth and expansion." Capital Total stockholders' equity was $18.0 billion at June 30, 2008 and tangible stockholders' equity was $13.3 billion, up $5.9 billion compared to March 31, 2008. During the second quarter of 2008, the Corporation raised $7.0 billion of equity capital by issuing common and contingently convertible preferred shares. The contingently convertible preferred shares will automatically convert into common shares five business days after stockholder approval. The shareholder meeting is scheduled for September 15, 2008. A copy of the company's financial report filed with the SEC is available at http://ResearchArchives.com/t/s?3006 About National City Corporation Headqurtered in Cleveland, Ohio, National City Corporation (NCC) -- http://www.nationalcity.com/-- is financial holding company that operates through an extensive distribution network in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania, and Wisconsin, and also conducts selected lending and other financial services businesses on a nationwide basis. The primary source of National City's revenue is net interest income from loans and deposits, revenue from loan sales and servicing, and fees from financial services provided to customers. Its operations are primarily conducted through more than 1,400 branch banking offices located within National City's nine-state footprint. In addition, National City operates over 410 retail mortgage offices throughout the United States. * * * As reported by the Troubled Company Reporter on July 15, 2008, National City Corporation, in response to market rumors, issued a statement saying it is experiencing no unusual depositor or creditor activity. It said that as of the close of July 11, 2008, the bank maintained more than $12 billion of excess short- term liquidity. "Further, as a result of our recent $7 billion capital raise, National City maintains one of the highest Tier I regulatory capital ratios among large banks," the company said. As reported by the TCR on June 9, 2008, National City Corp.'s banking unit has entered into a confidential agreement with the Office of the Comptroller of the Currency that effectively put the bank on probation. The TCR, citing The Wall Street Journal, reported that the terms of the agreement with National City aren't disclosed, however, regulators usually urge banks to maintain adequate capital and improve lending standards. According to WSJ, National City has been severely contracting its mortgage and home- equity lending, laying off hundreds of employees in the process. At March 31, 2008, total assets were $155.0 billion and stockholders' equity was $13.2 billion or 8.5% of total assets. At March 31, 2008, total deposits were $98.5 billion, including core deposits of $89.1 billion. Tangible equity to assets was 5.00% at March 31, 2008, compared to 5.29% at Dec. 31, 2007. The company's Tier 1 capital was 6.65% at March 31, 2008, which is above the "well-capitalized" threshold of 6.00%. The Corporation had no share repurchases in the first quarter of 2008 and none are planned. NATIONAL HOUSING: March & June 2008 Quarter Reports to be Delayed ----------------------------------------------------------------- National Housing Trust Limited Partnership said last week that until the company completes preparation and the company's auditor completes its review of the company's respective Form 10-K for 2006, and the Forms 10-Q for the periods ending March 31, 2007, June 30, 2007, and Sept. 30, 2007, and Form 10-K for 2007, it will be unable to complete its Form 10-Q for the periods ending March 31, 2008, and June 30, 2008. National Housing Trust, a limited partnership owning and operating properties qualifying for low-income housing credits, also disclosed that as part of its disposition plan, it sold eight properties in 2006, three in 2007 and four in the first two quarters of 2008. The company said that until it receives the financial information from those limited partnerships in which it is a limited partner, it will be unable to provide an estimate of the impact of these sales on results of operations. About National Housing Founded in 1987 and based in Columbus, Ohio, National Housing Trust Limited Partnership invests in low-income housing development properties in the United States. It acquires, maintains, and operates various housing properties. NHT Inc. serves as the general partner of the company. The current focus of NHTLP is disposition of its rental properties. * * * As reported in the Troubled Company Reporter on June 12, 2008, the company's combined balance sheet at Sept. 30, 2006, showed $25,237,000 in total assets and $44,929,000 in total liabilities, resulting in a $19,692,000 partners' deficit. NRIC PROPERTIES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: NRIC Properties, LLC 1317 Ridgewood Drive Starkville, MS 39759 Bankruptcy Case No.: 08-12889 Type of Business: The Debtor engages real estate development. See: http://nricproperties.com/ Chapter 11 Petition Date: July 24, 2008 Court: Northern District of Mississippi (Aberdeen) Debtors' Counsel: Craig M. Geno, Esq. (cmgeno@harrisgeno.com) Harris Jernigan & Geno, PLLC P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (601) 427-0048 Fax: (601) 427-0050 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor does not have any creditors who are not insiders. PACIFIC LUMBER: Maxxam Inks Pact with PBGC on PALCO Pension Plan ---------------------------------------------------------------- Maxxam Inc. and The Pension Benefit Guaranty Corporation entered into an agreement on July 10, 2008, pursuant to which the company essentially agreed, among other things, that should the PBGC elect to terminate The Pacific Lumber Company Pension Plan in the future, the company would continue to be liable for any unfunded obligations then outstanding with respect to the Plan. If such a termination was to be initiated, the company expects it would first take actions to assume sponsorship of the Palco Pension Plan in order to avoid such termination. Palco is an an indirect wholly owned subsidiary of the company. On Jan. 18, 2007, Palco and its subsidiaries, including Scotia Pacific Company LLC (Scopac), filed separate voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The PBGC Agreement terminates on the earliest of (i) the fifth anniversary of the effective date of the agreement, (ii) the date the Palco Pension Plan is assumed by the company, (iii) the date the Palco Pension Plan is terminated under certain standard termination procedures set forth in the Employee Retirement Income Security Act of 1974 (ERISA), or (iv) the date the Palco Pension Plan is properly merged into another plan in accordance with ERISA and the Internal Revenue Code. Under ERISA, if Palco's pension plan were to be terminated under certain circumstances, the company would be jointly and severally liable for any unfunded obligations with respect to the Palco Pension Plan. The plan of reorganization proposed by Mendocino Redwood Company and Palco's principal creditor, Marathon Structured Finance Fund L.P., in Palco, Scopac and Palco's other subsidiaries' bankruptcy cases, includes a provision pursuant to which the Palco Pension Plan would be assumed by the entity that would succeed the Debtors under the MRC/Marathon Plan. The MRC/Marathon Plan, the first of two plans of reorganization filed on the Jan. 30, 2008 deadline, would reorganize and continue the businesses of the Debtors. The second, which was a plan proposed on behalf of the holders of Scopac's $713.8 million principal amount (as of Dec. 31, 2006) of Timber Collateralized Notes, provides for an auction of Scopac's timberlands to the highest bidder. As reported by the Troubled Company Reporter on July 11, 2008, the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, confirmed on July 8, 2008, the Modified First Amended Joint Plan of Reorganization With Technical Modifications for the Debtors proposed by Marathon, Mendocino, and the Official Committee of Unsecured Creditors. Judge Richard Schmidt concluded that the Marathon/Mendocino Plan is compliant in all respects with the statutory requirements under Section 1129 of the Bankruptcy Code. A full-text copy of the Agreement dated July 10, 2008, between the PBGC and the company, is available for free at: http://researcharchives.com/t/s?2ff6 About MAXXAM Inc. Headquartered in Houston, MAXXAM Inc. (AMEX: MXM) is a publicly- traded company, with business interests in three industries: forest products, real estate investment and development and racing operations. As reported in the Troubled Company Reporter on May 19, 2008, MAXXAM Inc.'s consolidated balance sheet at March 31, 2008, showed $483.5 million in total assets and $779.6 million in total liabilities, resulting in a $296.1 million total stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on May 9, 2008, Deloitte & Touche LLP, in Houston, expressed substantial doubt about MAXXAM Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the uncertainty surrounding the ultimate outcome of the separate voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code filed by certain of the company's wholly owned subsidiaries, and its effect on the company, as well as the company's operating losses at its remaining subsidiaries. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. Kyung S. Lee, Esq., Esq., at Diamond McCarthy LLP is Scotia Pacific's co-counsel, replacing Porter & Hedges LLP. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. (Scotia/Pacific Lumber Bankruptcy News; http://bankrupt.com/newsstand/or 215/945-7000). PALM INC: Weak Sales Cue S&P to Cut Ratings with Negative Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Palm Inc. to 'B-' from 'B' and removed all the ratings from CreditWatch, where they had been placed with negative implications on March 21, 2008. The outlook is negative. At the same time, Standard & Poor's lowered its issue-level rating on the company's secured term loan and revolving credit facility to 'B-' from 'B+'. S&P revised its recovery rating on this debt to '4', indicating the expectation for average (30% to 50%) recovery in the event of a payment default, from '2'. "The actions reflect weak sales, ongoing operating losses, and negative free cash flows, as well as market challenges that could continue to pressure the company's operating results in the intermediate to longer term," said Standard & Poor's credit analyst Bruce Hyman. The rating on Sunnyvale, Calif.-based Palm reflects the company's high debt leverage, narrow range of products, substantial customer concentration, limited innovation, and a largely outdated product line. This leads to significant price pressures and operating losses. These factors are offset partially by Palm's good niche position attributed to a degree of customer loyalty, sufficient liquidity for intermediate-term operational purposes, and prospects that the company will be able to refresh its product offerings and rebuild its position with enterprise customers. PIPER RESOURCES: Seeks Farm In Funding, Moves CCAA Stay to Aug. 5 ----------------------------------------------------------------- Piper Resources Ltd. disclosed that the protection under the Companies Creditors' Arrangement Act which stayed its creditors from enforcing their rights was extended to Aug. 5, 2008, in order for the company to pursue financing of the activities under the Farm In. Farm-In Agreement Piper disclosed on June 25, 2007, that entered in an agreement to acquire all of the outstanding shares of two private oil and gas companies which hold assets in the Peace River Arch area of northwest Alberta. The Acquisition provides the Company with its initial purchase of oil and gas assets since its reorientation as an oil and gas exploration, development and production company in January 2007. The Company also entered into a farm-in agreement on additional lands adjacent to acreage acquired under the Acquisition. Under the terms of the farm-in, the Company is committed to spending $12.5 million by July 31, 2008 to earn a 50% working interest in an additional 10,240 acres. Financing of Debt to Matco Capital Ltd. Since the inception of the initial order, the company was seeking financing alternatives to replace a debt owed to Matco Capital Ltd., the company's secured creditor. After discussions with two investment groups based in New York, it was determined that the groups were not prepared to payout the Matco indebtedness in full by July 22, 2008. On July 17, 2008, the Troubled Company Reporter said that Piper Resources was granted an adjournment of a CCAA court proceedings until July 22, 2008. On Feb. 17, 2008, Piper was granted protection under the CCAA by an Initial Order from the Alberta Court of Queen's Bench which stayed its creditors from enforcing their rights until March 17, 2008. The protection was extended by subsequent court orders on March 17, 2008, April 28, 2008 and June 12, 2008. The June 12, 2008, court order extended the protection to July 15, 2008. As a result, Piper agreed to dispose of its assets to Matco in exchange for the Matco indebtedness. Deloitte & Touche LLP was appointed as Receiver over the assets and will transfer the lands secured by the Matco security and all related current assets to Matco, excluding the lands relating to the Farm In Agreement. Amendment to the Farm In The Farm In has been amended and allows Piper the ability to farm in on 9,600 or 4,204 net acres of land by paying 100% of the capital costs from drilling to equipping to earn a 70% working interest in the section with all of the activities to be completed by Oct. 31, 2008. Certain amended terms under the Farm In must be met by the company, which includes having adequate capital to complete all of the activities under the Farm In. Piper has been in discussions with groups to provide financing for these Farm In activities, however there can be no assurance that the company will obtain the necessary financing by Aug. 5, 2008. If there is no financing available, on acceptable terms, for the Farm In, the company will have no assets and will not be able to carry on operations past Aug. 5, 2008. The materials filed to date in the CCAA proceedings are available contacting the Receiver at (403) 298-5999 or by email at piper@deloitte.ca. About Piper Resources Ltd. Headquartered in Calgary, Alberta, Piper Resources Ltd. is a non- listed exploration, development and production company pursuing conventional oil and natural gas opportunities in western Canada. The company's core areas are focused in the Peace River arch area of northwestern Alberta, with operated production in the Gordondale, Pouce Coupe and Sinclair areas. On Feb. 15, 2008, Piper Resources Ltd. obtained creditor protection under the Companies Creditors Arrangement Act (Canada) pursuant to an Order from the Alberta Court of Queen's Bench. Piper Resources engaged Tristone Capital Inc. as its financial advisor to pursue strategic alternatives for the company in conjunction with the CCAA proceedings. PLASTECH ENGINEERED: JD Norman May Acquire Brooklyn, OH Plant Only ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan approved on June 19, 2008, the sale of Plastech Engineered Products Inc. and its debtor-affiliates' stamping business to JD Norman Ohio Holdings, Inc., which transaction included the sale of the stamping facility in Strongsville, Ohio. JD Norman, however, was unable to close on the Stamping Asset Purchase Agreement and consummate the sale. The Debtors relate that they continue negotiations on the Stamping Business Sale with JD Norman. JD Norman, however, has indicated that it may be prepared to consummate the Stamping Sale solely with respect to the Brooklyn, Ohio stamping facility. Under these circumstances, the Debtors have sought to cease operations at Strongsville by July 31, 2008. Meanwhile, Ford Motor Company, one of the largest customers at the Strongsville Facility, told the Debtors that it is resourcing its business at the Strongsville Site to Dee Zee, Inc., pursuant to which, Dee Zee intends to purchase for a $190,954 total price these inventory and equipment: Items Sale Price ----- ---------- Finished goods inventory $142,574 (50) P251 shipping racks 12,380 (28) WIP pouch racks 21,000 Capital equipment conveyor 15,000 The Debtors believe that the proposed sale to Dee Zee is a sale in the ordinary course of business in response to a customers' resourcing. Out of an abundance of caution, however, the Debtors have sought and obtained the approval of parties maintaining liens on the assets -- the Major Customers, as their postpetition lenders, and the Steering Committee, as prepetition term loan lenders. The Debtors, thus, stipulate for the sale of the Assets with these parties: * the Debtors' Major Customers -- Ford Motor Company, General Motors Corporation, Johnson Controls, Inc., and Chrysler, LLC, together with affiliates Chrysler Motors LLC, and Chrysler Canada, Inc.; * the Steering Committee of First Lien Term Loan Lenders; * Goldman Sachs Credit Partners L.P., as agent to the First Lien Term Loan Lenders; and * the Official Committee of Unsecured Creditors. The Debtors maintain that the assets represent idle assets that are of little value to their estate. The sale proceeds also reflect the value of the items sold, the Debtors tell the Court. Pursuant to Section 363(f) of the U.S. Bankruptcy Code, and as stipulated, the Debtors also propose to attach the lien of the parties-in-interest to the sales proceeds. Through a Court-approved stipulation, the Debtors and Ford, et al., agree that: -- the specified de minimis assets at the Strongsville Facility is sold to Dee Zee, Inc. free and clear of liens and encumbrances; and -- the liens of the parties-in-interest attach to the proceeds of the de minimis assets sale. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represents the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROXYMED INC: Gets Initial Approval to Use Laurus' $5.8MM DIP Loan ------------------------------------------------------------------ The Hon. Brendan L. Shannon of the United States Bankruptcy Court for the District of Delaware authorized ProxyMed Inc. and its debtor-affiliates to obtain, on an interim basis, up to $2,762,732 in postpetition financing from Laurus Master Fund Ltd., as lender. The Debtors are parties to a security and purchase agreement dated Dec. 6, 2005, with Laurus Master. The agreement provided up to $5,000,000 in term loan and $15,000,000 in revolving loan, which were secured by interest in substantially all of the Debtors' assets. As of their bankruptcy filing, the Debtors owe about $5,100,000 in principal plus $37,000 in interest to Laurus Master. A full-text copy of the security and purchase agreement dated Dec. 6, 2005, is available for free at: http://ResearchArchives.com/t/s?3001 In addition to their prepetition debt obligation, the Debtors issued $13,400,000 in unsecured 4% convertible notes due Dec. 31, 2008, under a certain indenture dated Dec. 31, 2002. The Debtors owe about $13,100,000 in principal and $294,000 in accrued interest to noteholders. The noteholders' claims are unsecured and pari passu with other unsecured claims. As reported in the Troubled Company Reporter on July 24, 2008, the Debtors received on May 14, 2008, a notice from Laurus Master that a cross-default had occurred under a security and purchase agreement, dated Dec. 7, 2005, and the related credit revolving facility. The cross-default occurred upon the Debtors' failure to pay interest in the amount of $131,370 on subordinated 4% convertible promissory notes, as part of the consideration paid in the the Debtors' acquisition of notes. Judge Shannon also authorized the Debtors to use the lender's cash collateral until Sept. 12, 2008. A full-text copy of the Debtors' cash collateral budget is available for free at: http://ResearchArchives.com/t/s?2fff Laurus Master committed to provide up to $5,894,052 in financing, on a final basis. The loan incurs interest at 12% per annum. It is expected to mature by Sept. 18, 2008. A hearing is set for Aug. 14, 2008, at 2:30 p.m., to consider final approval of the Debtors' request. Objections, if any, are due Aug. 7, 2008, by 4:00 p.m. The Debtors told the Court that they have an urgent need to use the proceeds of the facility to fund costs of business operations. "The company needs to raise funds to repay the prepetition loans or the notes upon their respective maturity dates," Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor, LLP, said. The DIP facility is subject to a $100,000 carve-out for payments to professional advisors to the Debtors and the committee. In addition, the Debtors will pay a host of fees including a $200,000 facility payment to the Laurus Master. To secure their DIP obligations, the lender will be granted superpriority claim status over all other costs and expenses of administration of any kind pursuant to Section 364(c)(1) of the Bankruptcy Code. The DIP facility contains customary and appropriate events of default. The facility will be terminated if the Debtors failed to obtain court approval of the sale of substantially all their assets by Sept. 3, 2008. On July 22, 2008, the Debtors entered into an asset purchase agreement with MHC Acquisition Corp., the designated stalk-horse bidder, for the sale of all their asset for $11,000,000 plus the assumption of certain liabilities. The sale of the Debtors' assets is subject to competitive bidding and auction. MHC Acquisition will receive a $350,000 break-up fee in the event the Debtors consummate the sale to another party. A full-text copy of the asset purchase agreement is available for free at: http://ResearchArchives.com/t/s?3002 Headquartered in Norcross, Georgia, ProxyMed Inc. fka MedUnite, Inc. -- http://www.medavanthealth.com-- facilitates the exchange of medical claim and clinical information. The company and two of its affiliates filed for Chapter 11 protection on July 23, 2008 (Bankr. D. Del. Lead Case No.08-11551). Kara Hammond Coyle, Esq., and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor, L.L.P., represent the Debtors in their restructuring efforts. The Debtors indicated $40,655,000 in total consolidated assets and $47,640,000 in total consolidated debts as of December 31, 2007. In its petition, ProxyMed Transaction Services, Inc. indicated $10,000,0000 in estimated assets and $10,000,000 in estimated debts. QUIGLEY CO: Judge Bernstein Adjourns Confirmation Hearing Sine Die ------------------------------------------------------------------ The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York adjourned the hearing on the confirmation of the fourth amended and restated Chapter 11 plan of reorganization of Quigley Co., Inc. to a date yet to be determined. The hearing was originally scheduled for Sept. 4, 2008. The postponement of the hearing came after the Court approved on June 23, 2008, two settlement agreements entered between the Debtors and certain insurers including Century Indemnity Company. According to Bloomberg News, the agreements is expected put at least $47 million into a trust to pay asbestos personal- injury claims. Century Indemnity holds a $455,228 in claims in the Debtor. Separately, the Court also extended the terms of the postpetition financing pursuant to the amended credit and security agreement, which the Debtor is allowed to: i) obtain up to $20 million in financing from Pfizer Inc., as lender, and ii) use Pfizer's cash collateral until Feb. 19, 2009. A full-text copy of the amended credit and security agreement is available for free at: http://ResearchArchives.com/t/s?2ffe As reported in the Troubled Company Reporter on April 3, 2008, The Hon. Stuart M. Bernstein of the United States Bankruptcy Court for the Southern District of New York approved for distribution the Debtor's fifth amended and restated Disclosure Statement dated March 28, 2008, explaining its fourth amended and restated Chapter 11 plan of reorganization. Judge Bernstein held that the Debtor's Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. Overview of the Plan Under the plan, all current and future asbestos personal injury claims that have been or could be asserted against Quigley will be "channeled" to a trust fund that will be created for the purpose of evaluating and paying such claims. In addition, all current and future asbestos personal injury claims that have been or could be asserted against certain companies other than Quigley, including Pfizer Inc., Quigley's parent company, also will be "channeled" to the trust, but only to the extent such claims are based on Quigley's conduct or products. The effect of "channeling" claims to the trust is that such claims may be pursued only through, and paid only from, the trust; they may not be asserted against Quigley, Pfizer and certain other companies as described fully elsewhere in the disclosure statement. The trust will be funded with assets of Pfizer and Quigley, including cash, insurance, stock, two annuities and dividends from Quigley's post-Effective Date business operations. In order to conserve Quigley's earnings for the benefit of the trust, Quigley will be prohibited from declaring or paying dividends while Pfizer continues to own Quigley's stock. The assets in the trust will be used to pay current and future asbestos personal injury claimants in accordance with the terms of trust distribution procedures established under Quigley's plan of reorganization. The trust's assets are limited, and will be managed by trustees to ensure that funds are available to pay expected future claimants as well as current claimants. The trust's limited assets are insufficient to pay more than a small percentage of each claimant's claim amount. Nevertheless, Quigley believes for all the reasons detailed in this disclosure statement that there will be substantially more money available to pay claimants under the plan than would be the case if there were no plan and Quigley were forced to pay claims solely from its own assets. Specifically, Quigley estimates that only approximately $259 million would be available for distribution in a liquidation, while, under Quigley's plan of reorganization, approximately $757 million will be available. That is because, among other reasons, Pfizer is contributing substantial assets to the trust as part of the plan that would not be contributed if the plan were not confirmed and consummated. Moreover, without the settlements and distribution procedures in the plan of reorganization, there likely would be years of costly and time-consuming litigation involving insurance companies, creditors and others that could be avoided through the plan's orderly administrative process. Absent a plan, the distributions of money to creditors would be delayed and, due to the costs of litigation, the amount of cash actually available for creditors would be reduced substantially. For this reason and others explained in detail herein, Quigley believes that each of its creditors who is entitled to vote should vote to accept this plan of reorganization. As of the date of this Disclosure Statement, there are pending: (i) a motion by the U.S. Trustee to convert or dismiss the Chapter 11 Case; and (ii) a motion by an ad hoc committee of tort claimants to appoint a trustee in the Chapter 11 Case. Quigley believes the motions are without merit, has filed written oppositions to each and intends to vigorously defend itself against the allegations made by the U.S. Trustee and the ad hoc committee. Trust Contributions Quigley and Pfizer will make these contributions to the trust to fund the processing and payment of asbestos personal injury claims: -- a $50 million cash payment; -- $101.9 million of insurance that contains no restrictions on the payment of asbestos personal injury claims; -- $191 million of insurance that contains restrictions on the payment of certain asbestos personal injury claims; -- receivables owed by insurance companies to Quigley, as of the date that Quigley's plan becomes effective, for amounts that Quigley billed the insurance companies before it filed for chapter 11 relief (as of March 1, 2008, these receivables total $23.8 million); -- $24 million in cash as of March 1, 2008, which is currently in an insurance trust account jointly held by Quigley and Pfizer; -- $4.6 million in excess cash that Quigley is expected to have in its accounts when the trust begins operating; -- $405 million, paid in accordance with the terms of an annuity that Pfizer will contribute to the Asbestos PI Trust on the Effective Date of Quigley's Plan, payable in equal installments over a period of 40 years, with the first installment payment payable on the date the trust begins operating; -- $45.1 million, paid in accordance with the terms of an annuity that Pfizer will contribute to the Asbestos PI Trust on the Effective Date of Quigley's Plan, payable in equal installments over a period of 41 years, with the first installment payment payable on the fifth anniversary of the Effective Date; -- additional payments or distributions from the estates of insolvent insurers; and -- Quigley's common stock, upon satisfaction of certain conditions described in Quigley's plan of reorganization. Treatment of Claims and Interests Under the plan, these claims will be paid in full: -- allowed administrative claims; -- professional compensation and reimbursement claims; -- priority tax claims; -- priority claims; and -- DIP claim. Pfizer, as a secured claimant, will receive in full in exchange for cash equal to 100% of the allowed amount of the allowed Pfizer Secured claim minus $30 million, which amount Pfizer forgive as part of the Pfizer contribution. Pfizer is expected to get a 54% recovery under the plan. The Secured Claimants -- Reaud Claimants, Hatchett, Sherry, Ytuarte and other secured bond claimants -- will be entitled to proceed with the pending appeal to final judgment. If the trial court will affirm judgment in their favor, they will be entitled to seek payment of the final judgment from the their corresponding Bond. If there is a deficiency claim, they will have to proceed against the Asbestos PI Trust in accordance with the Asbestos PI Trust Distribution Procedures. If the trial court judgment will be reversed on appeal, any Asbestos PI Claim that they may have will be automatically channeled to and assumed by the Asbestos PI Trust. Holders of unsecured claims, totaling approximately $33.4 million, will recover 7.5% of their claims. Asbestos PI Claims will be channeled and assumed by the Asbestos PI Trust, which will be funded by contributions from Quigley and Pfizer. Pfizer, as the sole holder of the Equity Interests, will transfer the common stock of Reorganized Quigley to the Asbestos PI Trust on the Stock Transfer Date. A full-text copy of the 5th Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?29e1 A full-text copy of the 4th Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?29e0 About Quigley Company Quigley Company Inc., a division of Pfizer Inc., sold asbestos- containing insulation products until the early 1970s. Quigley filed for protection under chapter 11 of the United States Bankruptcy Code on Sept. 3, 2004 (Case No. 04-15739-SMB) in order to implement a proposed global resolution of all pending and future asbestos-related personal injury liabilities. Asbestos victims and Pfizer have been negotiating a settlement deal which calls for Pfizer to pay $430 million to 80% of existing plaintiffs. It will also place an additional $535 million into an asbestos settlement trust that will compensate future plaintiffs as well as the remaining 20% of current plaintiffs with claims against Pfizer and Quigley. The compensation deal is worth $965 million all up. Of that $535 million, $405 million is in a 40-year note from Pfizer, while $100 million will come from insurance policies. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $155,187,000 in total assets and $141,933,000 in total debts. RAMPART MERCANTILE: CTO on Securities Removed, Reviews Options -------------------------------------------------------------- Rampart Mercantile Inc. disclosed that the British Columbia Securities Commission, the Alberta Securities Commission, the Ontario Securities Commission and the Quebec Securities Commission have each issued an order revoking the cease trade orders that were issued by each of those securities commissions against the company in 2002. The company is insolvent and has ceased to carry on an active business after the bankruptcy of the company's subsidiary, Rampart Securities Inc. which occurred on Oct. 31, 2001. The company is dependant on a continuation of cash advances from a debenture holder and minority shareholder in order to continue its business and cover operating expenses until it is able to generate cash flow from a new business opportunity. The board of directors of the company consists of these individuals: Dominique P. Monardo; Jon Bridgman; Donald Lyons; and Larry Cappe. The company does not have any definitive plans in place for the operation of the business going forward. The securities of the company will not trade on any published market in the near future, however, it is the intention of management of the company to investigate opportunities going forward. About Rampart Mercantile Inc. based in Toronto, Canada, Rampart Mercantile Inc. does not have significant operations. The company intends to acquire other operating entity. Previously, it engaged in the exploration and development of mineral properties business. At April 30, 2008, the company's balance sheet showed total assets of $58,458 and total liabilities of $6,858,785, resulting in a shareholders' deficit of $6,800,327. Default with 10% Debentures The company is in default with all of the 10% series and the conversion privileges on the debentures have expired. 10% series consists of two debentures. The first is a convertible debenture in the amount of $112,886 paying interest semi-annually not in advance and matured on April 16, 2001. The debenture is convertible into a unit for each $6 of principal. Each unit is comprised of one common warrant to purchase an additional share at a price of $8 per share. The second 10% series convertible debenture is in the amount of $2,000,000 paying interest semi- annually not in advance and matured on March 31, 2002. The second debenture is held by a shareholder of the company. Going Concern Doubt In the company's regulatory filing for the year ended April 30, 2007, the management stated there is substantial doubt for the company to continue as a going concern. At April 30, 2008, the company has a working capital deficiency of $6,801,985. The company's subsidiary is bankrupt and the company has no active business left. The company has been able to discharge its liabilities by securing cash advances from a individual who is a debenture holder and minor shareholder. The company is dependent on a continuation of these advances in order to continue in business until it is able to generate cash flow from a new business opportunity. RED SHIELD: Judge Approves $1.2 Million Financing ------------------------------------------------- Judge Louis Kornreich has allowed Red Shield Environmental LLC and RSE Pulp and Chemical LLC to borrow $1.2 million that will keep them open while they restructure under bankruptcy protection, reports say. As reported by the Troubled Company Reporter on June 30, 2008, Red Shield Environmental and RSE Pulp filed chapter 11 petition with the U.S. Bankruptcy Court for the District of Maine, Bangor Division. The rise in chip and oil prices has placed Red Shield "in a temporary cash flow bind," The Associated Press quoted owner Ed Paslawski, as stating. The companies shut down the Red Shield mill they own in operate in Old Town Maine in June. In June 18, McClatchy-Tribune Information Services said that at least 160 Red Shield workers were forced to remain at home when the Debtors' facility was temporarily shut down. Judge Kornreich has approved a loan of $427,000 from Chittenden Bank to allow Red Shield to pay employees their last two pay checks, reports WCSH-TV (Maine). According to the WABI 5 (Maine), the new financing will cover payroll, health insurance and other bills to keep the mill open through July. Ed Paslawski, the CEO of Red Shield and RSE Pulp and Chemical, says he's not planning to sell the mill to pay off the debts, though there have been some unsolicited offers, according to WABI. Red Shield officials are working with creditors to arrange for debt repayment. One of its creditors is Preti Flaherty, which was recently awarded a court settlement of more than $667,000 for back payments. That judgment has been put on hold while the companies work through Chapter 11 status, according to. About Red Shield Red Shield Environmental LLC -- http://www.redshieldenv.com/-- is an investment group focused on the refinancing and start up of Maine businesses. The company provides an energy related campus located in Old Town, Maine with an overall focus on renewable energy development. Prospective projects include production and design of cellulosic ethanol and other commercialized technologies. During 2006 and 2007 Red Shield Environmental accomplished manufacturing objectives for energy and pulp production. This allows the company to provide continued employment for many in the Old Town area with the potential for increased future employment in areas devoted to renewable energy and manufacturing. The Red Shield Environmental campus currently consists of Red Shield Environmental and RSE Pulp & Chemical. REVLON INC: Posts Preliminary Results For the 2008 Second Quarter ----------------------------------------------------------------- Revlon Inc. disclosed Thursday its preliminary estimated earnings for the second quarter ended June 30, 2008. Preliminary second quarter 2008 financial results, compared to the second quarter of last year: -- Net sales of approximately $375 million, compared to $349.2 million. -- Operating income of approximately $60 million, compared to $16.9 million. -- Net income of approximately $20 million, compared to a net loss of $11.3 million. -- Adjusted EBITDA of approximately $80 million, compared to $42.0 million. Revlon president and chief executive officer David Kennedy said, "Our strong preliminary results in the second quarter continue to validate our strategy. We continue to focus on the key drivers, including: innovative, high-quality, consumer-preferred new products; effective, integrated brand communication; competitive levels of advertising and promotion; and superb execution with our retail partners, which build our brands, particularly the Revlon brand, and generate sustainable, profitable sales growth. We also remain focused on controlling our costs and driving efficiencies throughout our organization, which continue to positively impact our margins and cash flows." Preliminary Second Quarter Results Net sales in the second quarter of 2008 increased by 8% to approximately $375 million, compared to net sales of $349.2 million in the second quarter of 2007. Excluding the favorable impact of foreign currency fluctuations, net sales in the second quarter increased approximately 6% versus year-ago. In the United States, net sales in the second quarter of 2008 increased 6% to approximately $215 million, compared to net sales of $204.2 million in the second quarter of 2007. The company reported that the primary driver of the second quarter net sales growth was higher shipments of Revlon color cosmetics, largely due to 2008 new product launches, including initial shipments of its more extensive second half 2008 new product lineup. In the company's international operations, net sales in the second quarter of 2008 increased 10% to approximately $160 million, compared to net sales of $145.0 million in the second quarter of 2007. Excluding the favorable impact of foreign currency fluctuations, net sales in the second quarter of 2008 increased 5% compared to the same period last year, reflecting primarily higher shipments of Revlon color cosmetics products launched in 2008. Each of the company's international regions, namely, Asia Pacific, Europe, and Latin America, experienced net sales growth and margin expansion in the second quarter of 2008 compared to the year-ago quarter. Operating income was approximately $60 million in the second quarter of 2008, versus $16.9 million in the second quarter of 2007. Net income in the second quarter of 2008 was approximately $20 million, compared with a net loss of $11.3 million in the second quarter of 2007. Adjusted EBITDA was approximately $80 million in the second quarter of 2008, compared to $42.0 million in the same period last year. Operating income, net income and Adjusted EBITDA in the second quarter of 2008 improved significantly compared to the same period last year, primarily driven by higher net sales and the non- recurrence of brand support in the second quarter of 2007 related to the launch of Revlon Colorist hair color. Operating income and Adjusted EBITDA in the second quarter of 2008 include a net gain of approximately $6 million related to the sale of a facility in Mexico. The expected full year impact of the sale of the facility in Mexico will be approximately $4 million, after recording restructuring and other related charges in the second half of the year. Adjusted EBITDA is defined as net earnings before interest, taxes, depreciation, amortization, gains/losses on foreign currency transactions, gains/losses on the early extinguishment of debt and miscellaneous expenses. The company's management utilizes Adjusted EBITDA as an operating performance measure in conjunction with GAAP measures, such as net income and gross margin calculated in accordance with GAAP. About Revlon Inc. Headquartered in New York City, Revlon Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti- perspirants/deodorants and personal care products company. The company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Bozzano(R), Gatineau(R) and Ultima II(R). At March 31, 2008, the company's consolidated balance sheet showed $882.6 million in total assets and $2.0 billion in total liabilities, resulting in a $1.1 billion total stockholders' deficit. ROCKFORD RIBS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Rockford Ribs, L.L.C. 1315 Franklin Grove Rd. Dixon, IL 61021 dba Damon's Grill Bankruptcy Case No.: 08-72339 Chapter 11 Petition Date: July 24, 2008 Court: Northern District of Illinois (Rockford) Debtor's Counsel: Bradley J. Waller, Esq. Email: bwaller@ksbwl.com Klein Stoddard Buck Waller & Lewis 2045 Aberdeen Ct. Sycamore, IL 60178 Tel: (815) 748-0380 Fax: (815) 748-4030 http://www.ksbwl.com/ Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of Rockford Ribs, LLC's petition is available for free at: http://bankrupt.com/misc/ilnb08-72339.pdf SEMGROUP ENERGY: Omnibus Agreement with SemGroup LP Has Terminated ------------------------------------------------------------------ SemGroup Energy Partners, L.P. (the Partnership) disclosed in a regulatory 8-K filing Thursday that as a result of the reconstitution of the five-member board of directors at SGLP's General Partner (SemGroup Energy Partners G.P., L.L.C.), to include two representatives from Manchester Securities Corp., one from Alerian Financial Partners, LP, and two existing independent directors, SemGroup, L.P.'s obligation to provide Partnership services under the Amended Omnibus Agreement has terminated. Manchester and Alerian effectively took control of the General Partner, on July 18, 2008. Manchester is an investment firm controlled by Elliott Associates, L.P., which together with its sister fund, Elliott International, L.P. have more than $10.5 billion of capital under management. Alerian is a registered investment advisor that manages portfolios exclusively focused on midstream energy master limited partnerships. In addition, the Partnership's license to use certain trade names and marks, including the name "SemGroup," has also terminated. SemGroup, LP (Parent) has continued to provide services to the Partnership since the change of control. The Partnership is discussing the continued provision of services and the license of certain trade names and marks with Parent. Other portions of the Amended and Restated Omnibus Agreement, including the indemnification provisions, non-competition restrictions and rights of first refusal are still in full force and effect. The Partnership and the general partner of the Partnership are party to an Amended and Restated Omnibus Agreement, dated Feb. 20, 2008, with SemGroup, L.P. and certain of its subsidiaries. The Omnibus Agreement and other agreements address, among other things, the provision of general and administrative and operating services to the Partnership. Parent's Bankruptcy Filing On July 22, 2008, Parent filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Various subsidiaries of Parent also filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code on such date. None of the Partnership, the General Partner, nor any of the subsidiaries of the Partnership or the General Partner were included in the Bankruptcy Filings. SGLP said Parent's actions related to the bankruptcy filings as well as Parent's liquidity issues and any corresponding impact upon the Partnership both before and after the bankruptcy filings may have in the past and may yet in the future result in events of default under the Partnership's Amended and Restated Credit Agreement, dated Feb. 20, 2008, among the Partnership, Wachovia Bank, National Association, as Administrative Agent, L/C Issuer and Swing Line Lender, Bank of America, N.A., as Syndication Agent and the other lenders from time to time party thereto. The Partnership and its subsidiaries are party to various agreements with Parent and its subsidiaries, including subsidiaries that are debtors in the bankruptcy filings. Under a Throughput Agreement, the Partnership provides certain crude oil gathering, transportation, terminalling and storage services to a subsidiary of Parent that is a debtor in the bankruptcy filings. Under a Terminalling and Storage Agreement, the Partnership provides certain liquid asphalt cement terminalling and storage services to a subsidiary of Parent that is a debtor in the bankruptcy filings. The Partnership derives a substantial majority of its revenues from Parent and its subsidiaries pursuant to the Throughput Agreement and the Terminalling and Storage Agreement. Under the terms of the Credit Agreement, an event of default will occur if Parent or its subsidiaries fail to make payments under the Throughput Agreement or the Terminalling and Storage Agreement. An event of default will also occur under the Credit Agreement if Parent or its subsidiaries fail to observe or perform any other term, agreement or condition contained in the agreements or other material agreements with Parent. In addition, the termination of certain provisions of the Amended and Restated Omnibus Agreement resulted in an event of default under the Credit Agreement. As a result of events of default under the Credit Agreement, the lenders under the Credit Agreement may, among other remedies, declare all outstanding amounts under the Credit Agreement immediately due and payable and exercise all rights and remedies available to the lenders under the Credit Agreement and related loan documents. The Partnership is in dialogue with the agent for the lenders regarding the events of default under the Credit Agreement, but no assurance can be given as to the outcome of these discussions. Other Events On July 21, 2008, the Partnership received a letter from the staff of the Securities and Exchange Commission notifying the Partnership that the SEC is conducting an inquiry relating to the Partnership and requesting, among other things, that the Partnership voluntarily preserve, retain and produce to the SEC certain documents and information relating primarily to the Partnership's disclosures respecting Parent's liquidity issues, which were the subject of the Partnership's July 17, 2008 press release. The Partnership has retained counsel and intends to cooperate fully with the staff's inquiry. On July 21, 2008, a lawsuit styled Poelman v. SemGroup Energy Partners, L.P., et al., Civil Action No. 08-CV-6477, was filed in the United States District Court for the Southern District of New York and, on July 22, 2008, a lawsuit styled Carson v. SemGroup Energy Partners, L.P., et al., Civil Action No. 08-CV-425, was filed in the United States District Court for the Northern District of Oklahoma against the Partnership, the General Partner, Kevin L. Foxx, Alex Stallings, and Gregory C. Wallace. Both cases were filed as putative class actions on behalf of all purchasers of the Partnership's common units between Feb. 20, 2008, and July 17, 2008. Plaintiffs allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, resulting in damages to members of the putative class. Plaintiffs' specific allegations include that, despite an obligation to do so, the Defendants failed to disclose between Feb. 20, 2008, and May 8, 2008 that Parent was engaged in high- risk crude oil hedging transactions that could affect its ability to continue as a going concern or that Parent was suffering from liquidity problems. The Partnership intends to vigorously defend these actions. On July 23, 2008, the Partnership and the General Partner each received Grand Jury subpoenas from the United States Attorney's Office in Oklahoma City, Oklahoma, requiring, among other things, that the Partnership and the General Partner produce financial and other records related to the Partnership's July 17, 2008 press release. The Partnership and the General Partner have retained counsel and intend to cooperate fully with this investigation. On July 17, 2008, SemGroup Energy Partners, L.P. issued a press release addressing the unusual volume and decrease in its unit price. A copy of the press release was filed as Exhibit 99.1 to the company's Form 8-K filing dated July 18, 2008. A full-text copy of the July 17, 2008 press release, filed as Exhibit 99.1 to the company's Form 8-K filing dated July 18 2008, is available for free at http://researcharchives.com/t/s?3011 About SemGroup Energy Partners Tulsa, Oklahoma-based SemGroup Energy Partners, L.P. (Nasdaq: SGLP) -- http://www.SGLP.com/-- owns and operates a diversified portfolio of complementary midstream energy assets. SemGroup Energy Partners provides crude oil and liquid asphalt cement terminalling and storage services and crude oil gathering and transportation services. As reported in the Troubled Company Reporter on July 21, 2008, Roy Jacobs & Associates is investigating possible securities law violations affecting the public shareholders of SemGroup Energy Partners, L.P. Roy Jacobs alleged that from the sale of at least 6 million units at $23.90 per unit on or about Feb. 20, 2008, in an offering through July 16, 2008, the stock traded at high levels, but plummeted in price on July 17, 2008. Roy Jacobs said that on July 17, 2008, after the news had become known to the market, it was disclosed that the company's parent, SemGroup L.P. was experiencing liquidity issues and was exploring various alternatives, including the filing for Bankruptcy protection. Roy Jacobs further stated that the company was spun off from the parent, but remains materially dependent on the parent. The parent owns and controls the company's general partner, and provides the company with employees to run its operations. Simultaneously with the closing of the offering, the company purchased the parent's asphalt operations for $378 million, using the proceeds from the offering and a credit line to effect that transaction. The parent is the company's only significant customer. * * * At March 31, 2008, SemGroup Energy Partners, L.P.'s consolidated balance sheet showed $262.0 million in in total assets and $316.6 million in total liabilities, resulting in a $54.6 million partners' deficit. SEMGROUP LP: Bankruptcy Won't Affect SemGroup Energy Unit --------------------------------------------------------- Officials at SemGroup LP's publicly traded affiliate, SemGroup Energy Partners, LP, assured investors in a conference call on July 22, 2008, that the company "is a separate entity that operates under a radically different business model" than that of its parent, NewsOK.com reported. During the conference call, SemGroup Energy's officials laid out survival strategies for the company, including: * Completingg an internal review of all relationships with SemGroup LP, which include throughput revenue and administrative services. * Aggressively seeking out new customers and product volumes for its petroleum and asphalt transportation, storage and terminalling operations. * Developing a new cash flow model independent of the SemGroup LP throughput contracts. * Pursuing merger and acquisition discussions with interested parties. "We feel confident about the ability of [SemGroup Energy] to succeed as an independent company," The Journal Record quoted Kevin Foxx, SemGroup Energy president and CEO, as saying. "Our assets remain strategically located and we are making effort to ensure our assets remain busy and generating cash flow. We are diligently focused on expanding third-party diversity of assets structure. We want to make sure our assets remain busy, maintain cash flow." Mike Brochetti, SemGroup Energy's chief financial officer, elaborated Mr. Foxx' statement by relating to investors that the company's second-quarter profits would beat prior guidance, the Journal Records said. According to Mr. Brochetti, 80% of SemGroup Energy's revenues from the second quarter were derived from its throughput contracts with SemGroup LP. Two of SemGroup Energy's investors -- Manchester Securities of New York and Alerian Capital Management of Dallas -- took control over the company, after activating a clause in a loan agreement on which SemGroup LP defaulted on. James Carnett, senior portfolio manager with Fredric E. Russell Investment Management Co., told the Journal Record that SemGroup still has an ongoing viable business with revenue-producing assets; however, he said the company still has $295,000,000 in debt on its balance sheets that is not related to the parent company. The New York Times echoed Mr. Carnett's opinion by saying that SemGroup LP could still drag SemGroup Energy down given the present condition of the credit markets. Shares in SemGroup Energy plunged 50% since July 17, the Wall Street Journal said. As of July 22, 2008, SemGroup's common stock closed at $8.22 per share. Sempra Energy shares were sold at $22 apiece in an initial public offering a year ago, Bloomberg News related. SemGroup Energy's officials contend that the company's survival is in the best interest of SemGroup LP, even in bankruptcy court. Mr. Brochetti told the Journal Record that SemGroup Energy has $8,000,000 in receivables from SemGroup LP, of which $2,700,000 is due August 15. SemGroup Energy also has more than $400,000,000 of SemGroup LP assets in storage, said Jerry Parsons, SemGroup Energy's executive vice president of asphalt operations, told the Journal Record. Days before SemGroup LP sought protection under Chapter 11, several shareholder actions on behalf of a class of investors were filed against SemGroup Energy. The lawsuits alleged that SemGroup LP was in financial difficulty or at high risk for financial difficulty as a result of its investment in risky crude oil hedge transactions but hid that situation from investors in SemGroup Energy. Rather, the lawsuits said, on or about February 20, 2008, SemGroup Energy effected a secondary offering, where it sold 6,000,000 units at $23.90 for proceeds of $137,000,000, and borrowed substantial funds and purchased SemGroup LP's asphalt business for $387,000,000. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. The Debtors' consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * On July 25, 2008, the Troubled Company Reported that Fitch Ratings downgraded the ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. and simultaneously withdrawn all ratings. The withdrawn ratings include Issuer default Rating D assigned to SemGroup, L.P., SemCrude, L.P., and SemCAMS Midstream Co. Fitch Ratings has downgraded, removed from Rating Watch Negative, and simultaneously withdrawn (a) SemGroup, L.P.'s Senior unsecured to 'C' from'B/RR3'; (b) SemCrude L.P.'s Senior secured working capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving credit facility to 'CC' from 'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'; and (c) SemCAMS Midstream Co. (SemCAMS) Senior secured working capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving credit facility to 'CC' from 'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'. Also, Moody's Investors Service downgraded SemGroup, L.P.'s Corporate Family Rating to Ca from Caa2, its Probability of Default Rating to D from Caa3, its senior unsecured rating to C (LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%). These actions affect rated cross guaranteed debt at parent SemGroup and its subsidiaries SemCams Holding Company and SemCrude, L.P. Further, Fitch Ratings lowered the Issuer Default Ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D' following the bankruptcy petition by SemGroup and most of units on July 22, 2008. These ratings are removed from Rating Watch where they were placed on July 17, 2008. The bank facility and securities ratings of SemGroup and units remain on Rating Watch Negative pending a review of the bankruptcy court petition. SEMGROUP LP: Affiliates Seek Protection Under CCAA (Canada) ----------------------------------------------------------- SemGroup L.P. affilates filing petitions under the Companies' Creditors Arrangement Act: Applicant File No. --------- -------- SemCAMS ULC 0801-08685 SemCanada Crude Company 0801-08510 CCAA Petition Date: July 22, 2008 Canadian Court: Court of Queen's Bench of Alberta Judicial District of Calgary Canadian Judge: Honorable Madame Justice Romaine Applicants' Solicitors: A. Robert Anderson, Q.C., Esq. Kelly Bourasa, Esq. Blake, Cassels & Graydon LLP 3500, 855 - 2nd Street Southwest Calgary, AB T2P 4J8 Tel No.: (403) 260-9624 Fax No.: (403) 260-9700 CCAA Monitor: Ernst & Young, Inc. Applicants Obtain CCAA Stay Order SemCAMS ULC and SemCanada Crude Company sought and obtained an order for creditor protection under the Companies' Creditors Arrangement Act before the Honourable Madame Justice Romaine in the Court of Queen's Bench of Alberta, in the Judicial District of Calgary, Canada. Until and including August 21, 2008, creditors and parties-in- interest are prohibited from commencing or continuing any action against the Applicants, their directors and officers, or Ernst & Young, Inc., as the proposed CCAA Monitor, except with the written consent of the Applicants and the Monitor, or with leave of the Canadian Court. The Applicants will remain in possession and control of their current and future assets, undertakings, and properties, including all their proceeds. The Applicants will continue to carry on business including, but not limited to, operation of their three sour natural gas processing plants known as the Kaybob South No. 3 Gas Plant, the Kaybob South Amalgamated Plant Nos. 1 and 2, and the West Whitecourt Gas Plant, and their sweet natural has processing plant known as West Fox Creek Plant, as well as all associated gas gathering and transportation pipelines. The Applicants will continue to hire employees, consultants, and other professionals they deem necessary in the ordinary course of business, to assist the Applicants in their restructuring, and continue to pay these employees and professionals in the ordinary course of business. The Applicants are authorized, but not directed, to pay all expenses necessary for the preservation of their properties and businesses provided that those capital expenditures will not exceed $5,000,000 in the aggregate for SemCAMS and $1,000,000 in the aggregate for SemCanada Crude. The Applicants are given the right to: (a) permanently or temporarily cease, downsize, or shut down any of their business or operations and to dispose of redundant or non-material assets not exceeding $250,000, in any one transaction, or $1,000,000 in the aggregate; (b) terminate the employment of employees or temporarily lay off employees as the Applicants may deem appropriate; (c) vacate, abandon, or quit any leased premises or repudiate any real property lease and any ancillary agreements relating to any leased premises; (d) pursue all avenues of refinancing and offers for material parts of the Applicants' business or property, in whole or in part; (e) repudiate those arrangements that the Applicants deem appropriate; and (f) settle claims of any of their customers and suppliers that in dispute. SemCAMS is permitted to borrow and repay from SemCanada Crude intercompany advances not exceeding $15,000,000, unless permitted by the Canadian Court. The Applicants will indemnify their directors and officers from all costs and expenses except to the extent of a director's or officer's breach of fiduciary duties or gross negligence. The directors and officers of the Applicants will be entitled to a director's charge not exceeding $3,000,000, for SemCAMS and not exceeding $1,000,000 for SemCanada Crude as security for the indemnity. The D&O will only be entitled to the Director's Charge to the extent they do not have coverage under by D&O's insurance policy. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. The Debtors' consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * On July 25, 2008, the Troubled Company Reported that Fitch Ratings downgraded the ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. and simultaneously withdrawn all ratings. The withdrawn ratings include Issuer default Rating D assigned to SemGroup, L.P., SemCrude, L.P., and SemCAMS Midstream Co. Fitch Ratings has downgraded, removed from Rating Watch Negative, and simultaneously withdrawn (a) SemGroup, L.P.'s Senior unsecured to 'C' from'B/RR3'; (b) SemCrude L.P.'s Senior secured working capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving credit facility to 'CC' from 'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'; and (c) SemCAMS Midstream Co. (SemCAMS) Senior secured working capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving credit facility to 'CC' from 'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'. Also, Moody's Investors Service downgraded SemGroup, L.P.'s Corporate Family Rating to Ca from Caa2, its Probability of Default Rating to D from Caa3, its senior unsecured rating to C (LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%). These actions affect rated cross guaranteed debt at parent SemGroup and its subsidiaries SemCams Holding Company and SemCrude, L.P. Further, Fitch Ratings lowered the Issuer Default Ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D' following the bankruptcy petition by SemGroup and most of units on July 22, 2008. These ratings are removed from Rating Watch where they were placed on July 17, 2008. The bank facility and securities ratings of SemGroup and units remain on Rating Watch Negative pending a review of the bankruptcy court petition. SEMGROUP LP: Ceases as White Cliffs Manager Over GECC Loan Default ------------------------------------------------------------------ General Electric Capital Corp., as administrative agent for a group of lenders on a $120,000,000 loan, on July 18, 2008, notified SemGroup L.P. and its debtor-affiliates that they are in default under the prepetition secured loan, and that all of SemCrude Pipeline, L.L.C.'s membership interest in non-debtor White Cliffs Pipeline, LLC, ceased and became vested in GECC. Under the prepetition loan agreement, SemCrude Pipeline pledged and granted a security interest in substantially all of its assets, including its membership interest in White Cliffs, to GECC as security for the loans. The loan agreement provides that upon occurrence of an event of default, all of SemCrude Pipeline's membership interest rights in White Cliff will cease and become vested in GECC. As a result of the Debtors' default under the loan agreements, GECC removed SemCrude Pipeline as manager of White Cliffs and appointed PE-Pipeline Services, L.L.C., as successor manager. According to GECC's counsel, Kurt F. Gwynne, Esq., at Reed Smith LLP, in Wilmington, Delaware, there is substantial and actual controversy that exists between GECC and the Debtors as to: (1) whether GECC properly exercised its rights under the loan agreements by appointing a new manager for White Cliff; and (2) whether White Cliff is the holder of the equitable interests in the construction and other contracts relating to the crude oil pipeline and its related facilities being constructed by White Cliff or the contracts are property of the Debtors. Accordingly, GECC and PE-Pipeline asked the U.S. Bankruptcy Court for the District of Delaware to declare that (i) their actions were lawful, valid, and binding on the parties; (ii) PE-Pipeline has been validly appointed as the successor manager of White Cliff; (iii) control of White Cliff, including management of its day-to-day operations, has passed from SemCrude Pipeline to PE- Pipeline; (iv) White Cliff is holder of the equitable interests in the Project Contracts; and (v) the equitable interests are not property of the estate of the Debtors. GECC and PE-Pipeline also asked the Court to (i) enjoin the Debtors taking any action to gain control over White Cliff's assets; (ii) order the Debtors to cooperate with PE-Pipeline in its efforts to operate White Cliff; and (iii) confirm PE- Pipeline's ability, while the Adversary Proceeding is pending, to take all acts necessary to preserve the current status quo, protect the value of White Cliff and its assets, and continue White Cliff's ongoing business operations including performance of the Project Contracts. Mr. Gwynne told the Court that despite repeated demands, SemCrude Pipeline has not recognized PE-Pipeline as the successor manager for White Cliff and refused to cooperate with PE-Pipeline in its demand for access to White Cliff, including its books and records. He asserts that it is essential to White Cliff's business that performance under the Project Contracts not be affected by the Debtors' bankruptcy filings. Mr. Gwynne further asserted that the Debtors' refusal to recognize PE-Pipeline as new manager for White Cliff is wrongful and contrary to applicable contracts and law, and risk immediate and irreparable harm to GECC and PE-Pipeline. About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08- 11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. The Debtors' consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * On July 25, 2008, the Troubled Company Reported that Fitch Ratings downgraded the ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. and simultaneously withdrawn all ratings. The withdrawn ratings include Issuer default Rating D assigned to SemGroup, L.P., SemCrude, L.P., and SemCAMS Midstream Co. Fitch Ratings has downgraded, removed from Rating Watch Negative, and simultaneously withdrawn (a) SemGroup, L.P.'s Senior unsecured to 'C' from'B/RR3'; (b) SemCrude L.P.'s Senior secured working capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving credit facility to 'CC' from 'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'; and (c) SemCAMS Midstream Co. (SemCAMS) Senior secured working capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving credit facility to 'CC' from 'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'. Also, Moody's Investors Service downgraded SemGroup, L.P.'s Corporate Family Rating to Ca from Caa2, its Probability of Default Rating to D from Caa3, its senior unsecured rating to C (LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%). These actions affect rated cross guaranteed debt at parent SemGroup and its subsidiaries SemCams Holding Company and SemCrude, L.P. Further, Fitch Ratings lowered the Issuer Default Ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D' following the bankruptcy petition by SemGroup and most of units on July 22, 2008. These ratings are removed from Rating Watch where they were placed on July 17, 2008. The bank facility and securities ratings of SemGroup and units remain on Rating Watch Negative pending a review of the bankruptcy court petition. SHAW GROUP: S&P Lifts Rating to BB+ on Good Cash Flow Generation ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on The Shaw Group Inc., including the corporate credit rating to 'BB+' from 'BB'. Baton Rouge, Louisiana-based Shaw is a leading global provider of engineering and construction, fabrication, environmental and industrial services. The outlook is stable. "The upgrade reflects Shaw's good cash flow generation, sizable cash balance and the continuation of favorable prospects in its end markets," said Standard & Poor's credit analyst Dan Picciotto. The company's reported backlog has grown to be greater than $16 billion, which excludes much of the work related to several nuclear project awards it has received this year. The ratings on Shaw continue to reflect the company's weak business risk profile marked by thin operating margins and exposure to cyclical end markets, which is offset by the company's leading market positions in some segments and good scope of operations. The company's financial risk profile benefits from improved cash balances and recently good cash flow generation. Shaw's reporting segments are fossil and nuclear (37% of revenues through the nine months ended May 31, 2008), environmental and infrastructure (21%), energy and chemicals (18%), maintenance (16%), and the smaller, but growing, fabrication and manufacturing group (8%), which boasts good profitability. Many of Shaw's end markets are experiencing cyclical upturns, which supports good intermediate-term growth prospects. As a result, Shaw's backlog was more than $16 billion at May 31, 2008. However, the cyclical nature of the company's end markets could contribute to the erosion of its operating performance in a downturn. Although operating margin (before depreciation and amortization) has improved, it remains thin, approaching 6% for the 12 months ended May 31, 2008. Shaw's credit measures have improved and funds from operations to total debt for the 12 months ended May 31, 2008, is greater than 70% (not including the debt associated with the 2006 acquisition of 20% of Westinghouse Electrical Co. for which the company holds put option rights). For the rating, Standard & Poor's expects FFO to total debt of about 30%, in addition to sufficient liquidity at all points in the cycle. The company has previously supplemented organic revenue growth with niche and strategic acquisitions. Standard & Poor's expects the company to finance future transactions in a manner consistent with its expectations at the current ratings. A revision of the outlook to positive or an upgrade could occur if Shaw can sustain its recently good operating performance, demonstrates a disciplined financial policy and develops a track record of solid accounting and corporate governance. A revision of the outlook to negative or a downgrade could occur if operating performance weakens meaningfully or if the company pursues more aggressive financial policies. SIMDAG-ROBEL LLC: Files Schedules of Assets & Liabilities --------------------------------------------------------- SimDag/Robel LLC filed with the U.S. Bankruptcy Court for the Middle District of Florida, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $21,500,000 B. Personal Property $172,801 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $12,981,096 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $24,066,444 ----------- ----------- TOTAL $21,672,801 $37,047,540 About SimDag-Robel Tampa, Florida-based SimDag/Robel, LLC, owns and operates a real estate business. The Debtor filed its Chapter 11 petition on June 17, 2008 (Bankr. M.D. Fla. Case No. 08-08804). Judge K. Rodney May presides over the case. Adam L. Alpert, Esq., and Jeffrey W. Warren, Esq., at Bush Ross, P.A., represent the Debtor in its restructuring efforts. The Debtor estimated assets between $10 million and $50 million and debts between $10 million and $50 million. The Debtor listed Jerry Barnett/Miguel Alfredo/Ron Yutrenka and Kevin Brodsky as its largest unsecured creditors; each is owed $1,600,000. SIMDAG-ROBEL LLC: Wants to Hire Bush Ross as Bankruptcy Counsel --------------------------------------------------------------- SimDag/Robel LLC asks permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Bush Ross P.A. as its general bankruptcy counsel. Bush Ross will, among others, give the Debtor legal advice with respect to its powers and duties as debtor-in-possession, represent the Debtor in any negotiations with potential financing sources, and represent the Debtor in the preparation of any plans of reorganization and disclosure statements. Documents submitted to the Court did not reveal the firm's hourly rates for services rendered to the Debtor. Jeffrey W. Warren, Esq., an attorney at Bush Ross, assures the Court that the firm does not represent any interest that is materially adverse to the Debtor's estates. Tampa, Florida-based SimDag/Robel, LLC, owns and operates a real estate business. The Debtor filed its Chapter 11 petition on June 17, 2008 (Bankr. M.D. Fla. Case No. 08-08804). Judge K. Rodney May presides over the case. Adam L. Alpert, Esq., and Jeffrey W. Warren, Esq., at Bush Ross, P.A., represent the Debtor in its restructuring efforts. The Debtor estimated assets between $10 million and $50 million and debts between $10 million and $50 million. The Debtor listed Jerry Barnett/Miguel Alfredo/Ron Yutrenka and Kevin Brodsky as its largest unsecured creditors; each is owed $1,600,000. SOLO CUP: Moody's Assigns Stable B3 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service assigned a Speculative Grade Liquidity Rating of SGL-2 to Solo Cup Company. Concurrently, Moody's also affirmed Solo Cup's B3 Corporate Family Rating and stable outlook. The SGL-2 liquidity rating reflects Solo Cup's adequate cash flow, covenant cushion and availability under credit facilities. Solo Cup's liquidity has been improved through the reduction in debt from the proceeds of asset sales and positive free cash flow generation from cost management and the divestiture of less profitable product lines. Funds from operations are expected to cover all cash needs over the next four quarters with the exception of the seasonally heavy first quarter which will require a modest draw on the revolver (depending upon resin prices). Free cash flow is expected to be sufficient for a modest level of debt reduction. Additional asset sales pending are bound by covenant to be applied to further debt reduction. The company is expected to maintain adequate cushion under its interest coverage ratio and leverage ratio covenant tests despite significant covenant step downs into year end 2008. Solo Cup has exceeded expectations year to date resulting in better than projected cushion under financial covenants. The SGL-2 rating remains sensitive to the company's level of funds from operations and cushion under financial covenants. A significant negative variance in operating performance would pressure the rating. Moody's ratings incorporate an expectation that the company will continue to maintain adequate cushion under its covenants, generate sufficient cash flow to cover the majority of cash needs, complete all asset sales before year end, and require only modest borrowings under its revolver. Headquartered in Highland Park, Illinois, Solo Cup Company is one of the largest domestic manufacturers of disposable paper and plastic food and beverage containers used in the foodservice and retail consumer markets. Products include cups, lids, straws, napkins, cutlery, and plates. Annual revenues were about $2.1 billion for the 12 months ended March 30, 2008. The corporate family rating is B3 and the ratings outlook is stable. SOPHIA MEIMAROGLOU: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Sophia Meimaroglou 1460 62 W. Fargo Chicago, IL 60626 Bankruptcy Case No.: 08-18941 Chapter 11 Petition Date: July 24, 2008 Court: Northern District of Illinois (Chicago) Judge: Jacqueline P. Cox Debtor's Counsel: Keevan D. Morgan, Esq. Email: slh158@yahoo.com Morgan & Bley, Ltd. 900 W. Jackson Blvd. Chicago, IL 60607 Tel: (312) 243-0006 Ext. 29 Fax: (312) 243-0009 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/ilnb08-18941.pdf STRATLAND ENTERPRISES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Lead Debtor: Stratland Enterprises of Buckeye, Inc. 6501 E. Greenway Pkwy., Ste. 103-482 Scottsdale, AZ 85254 Bankruptcy Case No.: 08-09297 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Stratland Enterprises of Coolidge, LLC 08-09299 Stratland Enterprises of Goodyear, Inc. 08-09300 Stratland Estates, LLC 08-09301 Chapter 11 Petition Date: July 24, 2008 Court: District of Arizona (Phoenix) Debtors' Counsel: Joseph E. Cotterman, Esq. Email: jec@gknet.com Gallagher & Kennedy, P.A. 2575 E. Camelback Rd. Phoenix, AZ 85016-9225 Tel: (602) 530-8000 Fax: (602) 530-8500 http://www.gknet.com/ Stratland Enterprises of Buckeye, Inc's Financial Condition: Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtors did not file lists of their largest unsecured creditors. TABERNACLE CHRISTIAN: Case Summary & 20 Unsecured Creditors ----------------------------------------------------------- Debtor: Tabernacle Christian Church 2500 E. Washington Street Suffolk, VA 23434 Bankruptcy Case No.: 08-72477 Type of Business: The Debtor is a church. Chapter 11 Petition Date: July 24, 2008 Court: Eastern District of Virginia (Norfolk) Judge: Stephen C. St. John Debtor's Counsel: Joseph T. Liberatore, Esq. Email: jliberatore@mclfirm.com Marcus, Crowley & Liberatore, P.C. 1435 Crossways Blvd., Suite 300 Chesapeake, VA 23320 Tel: (757) 333-4500 Fax: (757) 333-4501 http://www.mskpc.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/vaeb08-72477.pdf TARGA RESOURCES: S&P's 'BB' Rating Unmoved by New Commodity Swaps ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Targa Resources Partners L.P. (BB-/Stable/--) are unaffected by the announcement that the company unwound and entered into new commodity swaps at higher prices for a portion of its natural gas liquids and natural gas hedges in 2008-2010. The cost to unwind the swaps is not expected to harm Targa's liquidity or financial metrics. The new swaps, which directly hedge natural gas, natural gas liquids, and crude oil price exposures, require no posted collateral, minimizing liquidity risk. S&P views Targa's policy not to use crude oil as a proxy hedge for NGLs as supportive of credit, because the recent weakening in the correlation between NGL prices and the price of crude can expose a company to large out-of-the-money hedge positions. S&P expects the higher hedged prices to generate more favorable cash flows over the next year, and the company should maintain robust distribution coverage through the end of 2008. TAYLOR DIAGNOSTIC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Taylor Diagnostic Laboratory, Inc. dba ATS Testing Laboratory dba Lincoln Clinical Laboratory dba Lincoln Laboratory P.O. Box 22194 Owensboro, KY 42304 Bankruptcy Case No.: 08-40946 Chapter 11 Petition Date: July 24, 2008 Court: Western District of Kentucky (Owensboro) Debtor's Counsel: Mark R. Little, Esq. 44 Union St. Madisonville, KY 42431 Tel: (270) 821-0110 Fax: (270) 821-9901 Email: mrlittle@bellsouth.net Estimated Assets: Less than $50,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of Taylor Diagnostic Laboratory, Inc's petition is available for free at: http://bankrupt.com/misc/kywb08-40946.pdf THORNBURG MORTGAGE: T. Cooley Replaces Resigned Director in Board ----------------------------------------------------------------- On July 14, 2008, Stuart C. Sherman resigned from the Board of Directors of Thornburg Mortgage Inc. On July 17, 2008, Thomas F. Cooley was elected by the Board to fill the vacancy on the Board. Mr. Cooley will serve as a Class III director for a term ending at the annual meeting of shareholders to be held in 2009. Mr. Cooley was also appointed to the Audit Committee of the Board. In connection with the financing transaction that the company entered into on March 31, 2008, for the sale of senior subordinated secured notes, warrants to purchase shares of the company's common stock and a participation interest in certain of the company's mortgage-related assets (the Financing Transaction), and pursuant to the Warrant Agreement, dated as of March 31, 2008, among the company and the warrant holders signatories thereto, the company agreed to cause the Board to consist of 10 directors, subject to future increase or decrease in accordance with the company's bylaws and the Warrant Agreement. Under the Warrant Agreement, the company agreed that MP TMA LLC, MP TMA (Cayman) LLC and their respective affiliates (collectively, the MP Entities) may designate up to three directors, depending on the MP Entities' level of beneficial ownership in unexercised warrants, warrant shares or other shares of the Company's common stock. In addition, the company agreed to appoint to the Board designees of two investors party to the Warrant Agreement other than the MP Entities. On April 22, 2008, the MP Entities designated two directors, David J. Matlin and Mark R. Patterson, who continue to serve on the Board. Based on the MP Entities' current beneficial ownership levels in unexercised warrants, warrant shares or other shares of the company's common stock, the MP Entities continue to have the right to designate one additional director at this time. On July 17, 2008, one of the investors party to the Warrant Agreement other than the MP Entities designated Mr. Cooley to serve on the Board and the investors other than the MP Entities continue to have the right to designate one additional director at this time. About Thornburg Mortgage Inc. Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable- rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. At March 31, 2008, the company's consolidated balance sheet showed $30.8 billion in total assets, $31.9 billion in total liabilities, and $1.0 billion in preferred stock, resulting in a $2.1 billion stockholders' deficit. * * * As reported in the Troubled Company Reporter on June 27, 2008, Moody's Investors Service affirmed Ca and C senior debt and preferred stock ratings, respectively of Thornburg Mortgage Inc. Thornburg's Ca debt rating remains under review for possible downgrade. Moody's said that Thornburg's efforts to raise capital to avoid default under its repo agreements have resulted in the reconfiguration of its balance sheet with adverse impact on its debt and preferred equity holders. TOYS 'R' US: Fitch Holds Ratings on Operating Strategy Success -------------------------------------------------------------- Fitch Ratings has affirmed its ratings on Toys 'R' Us, Inc. as: Toys 'R' Us, Inc. -- Issuer Default Rating 'B-'; -- Senior Unsecured Notes 'CCC-/RR6'. Toys 'R' Us, Delaware -- IDR 'B-'; -- Secured revolver 'B/RR3'; -- Secured term loan 'CCC+/RR5'; -- Unsecured term loan 'CCC/RR6'; -- Senior unsecured notes 'CCC/RR6'. TRU 2005 RE Holding Co. -- IDR 'B-'; -- Structured credit facility 'B/RR3'. Toys 'R' Us (UK) Ltd. -- IDR 'B-'; -- Multicurrency sec. revolver 'B/RR3'. The Rating Outlook is Stable. TOY had $6 billion in debt outstanding at May 3, 2008. The affirmations reflect TOY's successful operating strategy which has resulted in continued improvement in the operating performance at TOY's U.S. toy segment and steady performance in the international toy and Babies 'R' Us segments. The ratings also reflect TOY's highly leveraged balance sheet, the intense competition in toy retailing, and the possibility of a recurrence of toy safety concerns. In 2006 and 2007, TOY's U.S. toy segment reported positive comparable store sales after five years of negative comparable store sales as a result of exclusive product offerings, good customer service and the company's juvenile strategy of providing additional outlets for Babies 'R' Us products while driving incremental traffic to Toys 'R' Us locations. This strategy involves the conversion of existing Toys 'R' Us stores into Toys 'R' Us and Babies 'R' Us side-by-side stores, building new stores in this format and expanding the juvenile section in existing toy stores, with products available in Babies 'R' Us stores. In addition, the company's international toy and Babies 'R' Us segments continued to achieve low- to mid-single-digit comparable store sales growth during the same time period. However, first- quarter 2008 comparable store sales were negative in the international and U.S. toy segments due to a calendar shift in Japan and weakness in some product categories. Nevertheless, inventory management efforts have resulted in operating EBIT margin expansion of 50 basis points to 4.7% in the last 12 months ending May 3, 2008 from 4.2% in 2007. TOY's EBIT margin was 2.9% in 2005. As a result, TOY's credit metrics have strengthened with LTM adjusted debt/EBITDAR decreasing to 6.4 times from 6.8x in 2006, but leverage remains high. In addition, LTM EBITDAR coverage of interest and rent increased to 1.6x from 1.4x in 2006. Fitch anticipates gradual operating performance improvement this year as the company continues implementing its juvenile strategy, including rolling out more Toys 'R' Us and Babies 'R' Us side-by- side stores and remodeling the existing store base to improve the shopping experience. In addition, increased sales of higher- margin baby products and management's efforts to control costs should help expand operating profit margins over time. Of concern is the strong competition in the toy retailing business. TOY competes with a number of retailers, including other toy retailers, discounters, and catalog and Internet businesses. Fitch expects price competition will continue to be intense this holiday season as retailers promote heavily to drive traffic into the stores. In addition, the company's operating performance could be negatively affected in the event toy safety concerns were to resurface, resulting in toy recalls. The ratings of the various classes of debt listed above reflect their respective recovery prospects. Fitch's recovery analysis assumed an enterprise value of $4.5 billion in a distressed scenario. Applying this value across the capital structure results in good recovery prospects (51%-70%) for the asset-based revolvers which are secured by inventory, receivables and certain Canadian real estate in North America and all assets in Europe. The secured term loan is secured by intellectual property and second liens on accounts receivable and inventory of TOY-Delaware and the guarantors, and have below average recovery prospects (11%-30%). The senior unsecured notes at TOY-Delaware have poor recovery prospects (less than 10%). The senior unsecured notes at the holding company level are structurally subordinated, and are rated 'CCC-/RR6', also reflecting poor recovery prospects (less than 10%) in a distressed case. TRIZETTO GROUP: Moody's Assigns Stable B1 Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned to TriZetto Group, Inc. first time corporate family and probability of default ratings (CFR and PDR) of B1. Concurrently, Moody's assigned Ba3 ratings to TriZetto's proposed $78 million Term Loan A, $315 million Term Loan B, and $65 million revolving credit facility. The rating outlook is stable. On April 11, 2008, TriZetto disclosed that it had entered into a definitive agreement to be acquired and taken private by Apax Partners for approximately $1.4 billion. On July 14, 2008, the company's shareholders approved the proposed acquisition. The specific instrument ratings assigned incorporate both the PDR and loss given default (LGD) rates for the individual securities. These are subject to change should the mix of capital change upon the close of the transaction. The B1 corporate family rating reflects the strength of TriZetto's market position as a leading provider of I.T. solutions to healthcare payers, favorable industry dynamics marked by the need to upgrade legacy software platforms and improve administrative efficiency, a stable customer base, and its unique customer/investor relationship with BlueCross BlueShield (BCBS) of Tennessee and Regence, which potentially provides incremental sales opportunities with other BCBS organizations. The rating is supported by a recurring revenue model that should withstand economic cycles given the ongoing need for medical care, its competitive product portfolio, sticky customer relationships, mission critical nature of its products, and high switching costs. The rating is constrained by TriZetto's high leverage arising from the LBO transaction, relatively modest size in a highly competitive and rapidly changing healthcare niche with formidable large-scale competitors, and consolidation risk of healthcare payer organizations which could reduce the number of existing or potential customers. The stable rating outlook reflects the company's solid operating performance given its leading market position and deeply- entrenched customer base secured by long term contracts. Moody's expects the company to generate consistent free cash flow and that the company will pay down debt before making any significant acquisitions. Ratings/assessments assigned: -- Corporate family rating of B1; -- Probability-of-default rating of B1; -- $78 million secured Term Loan A facility due 2014 of Ba3 (LGD 3, 34%); -- $315 million secured Term Loan B facility due 2015 of Ba3 (LGD 3, 34%); -- $65 million secured revolving credit facility expires 2014 of Ba3 (LGD 3, 34%); Headquartered in Newport Beach, California, TriZetto Group, Inc. is a leading provider of I.T. solutions that enable payers and other constituents in the healthcare supply chain to improve the coordination of benefits and care for healthcare consumers. TRM CORP: Approves Amendment to 2005 Omnibus Stock Incentive Plan ----------------------------------------------------------------- Effective July 10, 2008, pursuant to shareholder approval, TRM Corp. approved an amendment to its 2005 Omnibus Stock Incentive Plan to increase the number of shares of the company's common stock available for issuance under such plan by 1,000,000 shares. About TRM Corp. Headquartered in Portland, Ore., TRM Corporation (OTC: TRMM) -- http://www.trm.com/-- is a consumer services company that provides convenience ATM services in high-traffic consumer environments. TRM operates the second largest non-bank ATM network in the United States. As reported in the Troubled Company Reporter on May 22, 2008, the company's consolidated balance sheet at March 31, 2008, showed $97.8 million in total assets, $82.5 million in total liabilities, $1.5 million in minority interest, and $13.8 million in total stockholders' equity. Going Concern Doubt McGladrey & Pullen LLP, in Blue Bell, Pa., expressed substantial doubt about TRM Corp.'s ability to continue as a going concern after auditing the company's considated financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the incurred net losses in 2006 and 2007 of approximately $120.0 million and $8.0 million, respectively. The auditing firm added that it is uncertain if 2008 operations will generate sufficient cash to enable the company to comply with the covenants of the company's loan agreements and to pay its obligations on an ongoing basis. In addition, the auditing firm said that a default under the company's financing agreement with GSO Origination Funding Partners LP may render the debt callable and trigger the cross-default provision in TRM Inventory Funding Trust's Loan and Servicing Agreement. After borrowing $11.0 million under the Lampe Loan Facility in April 2008 and the repayment of the remaining balance with GSO, the company has eliminated its position of default that could have triggered additional cross defaults raising questions about its ability to continue as a going concern. TROPICAL INN: Wants to Employ Buddy Ford as Bankruptcy Counsel -------------------------------------------------------------- Tropical Inn Inc. asks permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Buddy D. Ford P.A. as its bankruptcy counsel. Buddy Ford, Esq., an attorney at the firm, will, among others, give the Debtor legal advice with respect to its powers and duties as debtor-in-possession. Mr. Ford tells the Court that he will charge the Debtor an hourly rate of $300. He further assures the Court that the firm does not represent any material interest that would be adverse to the Debtor's estate. Based in Naples, Florida, Tropical Inn Inc. develops real estate property. The company filed for Chapter 11 protection on June 13, 2008 (Bankr. M.D. Fla. Case No. 08-08651). Buddy D. Ford, Esq., at Buddy D. Ford P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $15,115,010, and total debts of $11,729,420. VANTAGE LOFTS: Taps Acceleron Group as Financial Advisor -------------------------------------------------------- Vantage Lofts LLC seeks authority from the U.S. Bankruptcy Court for the District of Nevada to emPloy the Acceleron Group LLC as its financial consultant. Acceleron Group will, among others, assist the Debtor in negotiating with creditors and assistance in resolving disputes with the Debtor's lenders, and assist the Debtor in obtaining debtor-in-possession financing and to work with the DIP lender throughout the construction of the Debtor's condominium project. The Debtor tells the Court that Acceleron Group has received a retainer of $10,000 before the bankruptcy filing, and wishes to retain Dr. Kenneth W. Wiles and Leonard Kep Sweeney, the professionals who will conduct financial advisory services, under a monthly retainer of $30,000. The Debtor says that, to the best of its knowledge, the firm does not represent any interest that is adverse to the its estates. Based in Las Vegas, Nevada, Vantage Lofts LLC -- http://www.vantagelofts.com/-- builds and develops property. The company file for Chapter 11 protection on June 20, 2008 (Bankr. D. Nev. Case No.08-16586). Matthew L. Johnson, Esq., Matthew L. Johnson & Associates P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed total assets of $45,100,104 and total debts of $72,459,622. VERIFONE HOLDINGS: NYSE Grants Continued Listing Until October 31 ----------------------------------------------------------------- VeriFone Holdings Inc. has been granted an additional period for continued listing and trading on the New York Stock Exchange through Oct. 31, 2008, subject to reassessment on an ongoing basis. During this period the company's trading on the New York Stock Exchange will remain unaffected. If VeriFone does not make the required filings during this additional period, the NYSE could either grant a further additional extension or move forward to initiate suspension and delisting procedures. VeriFone is continuing to work diligently on completing the restated financial statements and related disclosures for the three quarterly periods being restated and its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for the fiscal periods subsequent to July 31, 2007 and will make the required filings as soon as practicable. About VeriFone Holdings, Inc. Headquartered in San Jose, California, VeriFone Holdings, Inc. (NYSE: PAY) -– http://www.verifone.com-- is a provider in secure electronic payment solutions. VeriFone provides expertise, solutions and services that add value to the point of sale with merchant-operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets. VeriFone solutions are designed to meet the needs of merchants, processors and acquirers in developed and emerging economies worldwide. WACHOVIA BANK: Moody's Cuts Rating on Class H $41.2MM Notes to Ba2 ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of three classes and placed four classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005- C20 on review for possible downgrade. -- Class D, $68,697,000, currently rated A2; on review for possible downgrade -- Class E, $41,218,000, currently rated A3; on review for possible downgrade -- Class F, $41,218,000, downgraded to Baa2 from Baa1; on review for possible downgrade -- Class G, $32,059,000, downgraded to Baa3 from Baa2; on review for possible downgrade --Class H, $41,218,000, downgraded to Ba2 from Baa3 Moody's downgraded Classes F, G and H and placed Classes D, E, F and G on review for possible downgrade due to expected losses associated with the specially serviced Macon & Burlington Mall Pool Loan ($137.7 million - 4.1%). The loan is secured by the borrower's interest in two regional malls containing a total of 1.8 million square feet located in Macon, Georgia (1.4 million square feet) and Burlington, North Carolina (419,000 square feet). The Macon Mall has an in-line occupancy rate of approximately 74.0% and is anchored by Sears, Dillard's Belk, JC Penney and Macy's. The Burlington Mall has an in-line occupancy rate of approximately 53.0% and is anchored by Sears. Both centers have been impacted by increased competition which has resulted in significant tenant turnover. The loan was transferred to special servicing in March 2008. The borrower is in monetary default as of June 11, 2008. The special servicer has engaged a receiver for both properties and has initiated foreclosure proceedings. In July 2008 the special servicer recognized an $80.0 million appraisal reduction. Moody's will continue to monitor the special servicer's efforts to stabilize the properties. WASHINGTON MUTUAL: Analysts Predict Capital Need After $3BB Loss ---------------------------------------------------------------- Piper Jaffray Cos. analyst Robert Napoli and analysts at Merrill Lynch & Co. and Friedman Billings Ramsey Group Inc. said Washington Mutual Inc. may need more capital, according to Ari Levy of Bloomberg News. $3.33 Second Quarter Net Loss WaMu announced on July 22 a second quarter 2008 net loss of $3.33 billion as it significantly increased its loan loss reserves by $3.74 billion to $8.46 billion. The quarter's loss compares with the first quarter net loss of $1.14 billion and net income of $830 million during the second quarter of 2007. The quarter's financial results reflect an elevated level of provisioning due in large part to changes in the company's provisioning assumptions in response to continued declines in housing prices nationwide. These changes had the effect of accelerating provisions into the quarter. The quarter's provision was $5.9 billion compared with $2.2 billion of net charge-offs. The company now expects the remaining cumulative losses in its residential mortgage portfolios to be toward the upper end of the range it disclosed in April, and continues to expect 2008 to be the peak year for provisioning. The company's tangible equity to total tangible assets capital ratio increased during the second quarter to 7.79 percent from 6.40 percent in the first quarter, resulting in approximately $7 billion of capital in excess of its targeted 5.50 percent level. The increase reflects the effects of the $7.2 billion capital raise, the reduction of the company's balance sheet by $10 billion and the loss for the quarter. The company also maintained strong levels of liquidity during the quarter, with over $40 billion of readily available liquidity at quarter end. "In the face of unprecedented housing and mortgage market conditions, we are continuing to execute on a comprehensive plan designed to ensure that we have strong capital and liquidity, an appropriately-sized expense base and a strong, profitable retail franchise," said WaMu Chief Executive Officer Kerry Killinger. "Our recent $7.2 billion capital raise, combined with the other proactive steps we have taken this quarter to strengthen our banking franchise and further expense reductions, continue to move us toward achieving these goals." Killinger also said that the company now expects to realize annualized cost savings of approximately $1 billion which will contribute to improved pretax, pre-provision earnings. "We remain confident that we have sufficient capital to successfully manage our way through this challenging period," Mr. Killinger added. The company reported a second quarter diluted loss per share of $6.58, which included a previously disclosed one-time earnings per share reduction in the amount of $3.24 related to the company's capital issuance in April. Excluding this one-time reduction, the company's second quarter loss per common share was $3.34. This non-cash reduction in earnings per share, which resulted in a reclassification within stockholders' equity, had no effect on the company's capital ratios or the net loss recorded in the second quarter. A full-text copy of the company's second quarter report is available for free at http://ResearchArchives.com/t/s?3007 Analysts' Comments Mr. Napoli cut his rating to "sell" in a report on July 23 because the Seattle-based lender's balance sheet is "burdened with high- risk mortgage loans," according to Bloomberg. Friedman Billings Ramsey analyst Paul Miller told Bloomberg Television in an interview: "At some point WaMu is going to have to come back to the capital markets." Mr. Miller rates the shares "underperform," the report says. Merrill Lynch analyst Kenneth Bruce in San Francisco cut his rating to "underperform" on Wednesday, citing the likelihood of $27 billion in cumulative losses through 2010 and a tangible equity ratio in 2011 that's below a "self-imposed floor," according to Bloomberg. Citing the company's financial statements for the period ending June 30, Gimme Credit analyst Kathleen Shanley wrote that "many creditors have quietly been pulling funds" from WaMu, according to Anastasija Johnson and Jonathan Stempel of Reuters. WaMu Spokesman's Response A WaMu spokesman responded to Ms. Shanley's statement stating the company does not need to rely on funding from outside sources, reports say. "As we stated publicly months ago, Washington Mutual funds all of its business through its banking operations and does not rely on commercial paper," the spokesman added, according to MarketWatch. The MarketWatch report noted that the thrift stopped using commercial paper roughly a year ago. It also noted that at end of June, WaMu had more than $40 billion in liquidity, or access to cash and other assets that can be easily converted to cash. WaMu shares fell 20 percent or $1.17 to $4.65 at 4:02 p.m. in New York Stock Exchange composite trading on Wednesday, the report notes. The stock has tumbled 66 percent this year. in New York trading, according to the report. As reported by the Troubled Company Reporter on July 15, in response to the uncertainty in the marketplace, WaMu said it significantly exceeds all regulatory well-capitalized minimums for depository institutions and has excess liquidity of more than $40 billion, The Wall Street Journal reported. As reported by the TCR on July 24, Moody's Investors Service placed the ratings of WaMu, having a Baa3 senior unsecured rating, and Washington Mutual Bank, having a C- financial strength rating of, Baa2 long term deposit rating, and Prime-2 short term rating, under review for downgrade. The review follows WaMu's reported $3.3 billion loss for the second quarter of 2008. During its review, Moody's will assess the affect of Wamu's recent and expected operating performance on its financial flexibility. About Washington Mutual Inc. Washington Mutual Inc. (NYSE: WM) -- http://www.wamu.com/-- is a consumer and small business banking company with operations in United States markets. The Company is a savings and loan holding company. It owns two banking subsidiaries, Washington Mutual Bank and Washington Mutual Bank fsb, as well as numerous non-bank subsidiaries. The company operates in four segments: the Retail Banking Group, which operates a retail bank network of 2,257 stores in California, Florida, Texas, New York, Washington, Illinois, Oregon, New Jersey, Georgia, Arizona, Colorado, Nevada, Utah, Idaho and Connecticut; the Card Services Group, which operates a nationwide credit card lending business; the Commercial Group, which conducts a multi-family and commercial real estate lending business in selected markets, and the Home Loans Group, which engages in nationwide single-family residential real estate lending, servicing and capital markets activities. WATERBROOK PENINSULA: Section 341(a) Meeting Scheduled for Aug. 5 ----------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of Waterbrook Peninsula LLC's creditors on Aug. 5, 2008, at 3:30 p.m., at the U.S. Courthouse, 299 East Broward Boulevard, Suite 411, in Fort Lauderdale, Florida. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Based in Deerfield Beach, Florida, Waterbrook Peninsula LLC develops real estate property. The company filed for Chapter 11 protection on June 25, 2008 (Bankr. S.D. Fla. Case No. 08-18603). When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million, and estimated debts of $10 million to $50 million. WATERBROOK PENINSULA: Can Hire Messana as Counsel on the Interim ---------------------------------------------------------------- Waterbrook Peninsula LLC obtained interim permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Messana Weinstein & Stern P.A. as its bankruptcy counsel. Messana Weinstein is expected to, among others, advise the Debtor with respect to its powers and duties as debtor-in-possession, and assist the Debtor in formulating its plan of reorganization and disclosure statement. Thomas M. Messana, Esq., a partner at Messan Weinstein, told the Court that the firm's professionals bill these hourly rates: Thomas M. Messana $460 Scott Underwood $285 Attorneys $225 - $460 Paralegals $105 - $165 Mr. Messana assured the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Based in Deerfield Beach, Florida, Waterbrook Peninsula LLC develops real estate property. The company filed for Chapter 11 protection on June 25, 2008 (Bankr. S.D. Fla. Case No. 08-18603). When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million, and estimated debts of $10 million to $50 million. WATERSTONE LLC: Taps Cecilia Rosenauer as Bankruptcy Counsel ------------------------------------------------------------ Waterstone LLC asks permission from the U.S. Bankruptcy Court for the District of Nevada to employ Cecilia L. Rosenauer Ltd. as its bankruptcy counsel. Cecilia L. Rosenauer, Esq. will, among others, examine and prepare record and reports in the Debtor's Chapter 11 case, give legal advice to the Debtor with regards to its powers and duties as debtor-in-possession, assist the Debtor in crafting its plan of reorganization and related disclosure statement. Ms. Rosenauer tells the Court that the firm's professionals bill these hourly rates: Cecilia L. Rosenauer $350 Contract Attorneys $200 Legal Assistants $95 Ms. Rosenauer assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Sparks, Nevada-based Waterstone LLC filed for Chapter 11 protection on June 15, 2008 (Bankr. D. Nev. Case No. 08-50954). When the company filed for protection from its creditors, it listed $10 million to $50 million in estimated assets, and less than $50,000 in estimated debts. WINDY CITY: Section 341(a) Meeting Scheduled for July 29 -------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of Windy City Group LLC's creditors on July 29, 2008, at 3:00 p.m., at the U.S. Trustee Meeting Room, 230 North First Avenue, Suite 102, in Phoenix, Arizona. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Scottsdale, Arizona-based Windy City Group LLC filed for Chapter 11 protection on June 18, 2008 (Bankr. D. Ariz. Case No. 08- 07274). Tim Coker, Esq., at the Coker Law Office, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million, and estimated debts of $10 million to $50 million. WINDY CITY: Wants to Employ Tim Coker as Bankruptcy Counsel ----------------------------------------------------------- Windy City Group LLC obtained permission from the U.S. Bankruptcy Court for the District of Arizona to employ Tim Coker, Esq., as its bankruptcy counsel. Mr. Coker is expected to, among others, give the Debtor legal advice regarding its rights and powers as debtor-in-possession, prepare the Debtor's schedules, statements, motions, and other documents, and assist the Debtor in coming up with a plan of reorganization and disclosure statement. Mr. Coker told the Court that he will charge the Debtor an hourly rate of $200 for his services. He further assured the Court that he is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Scottsdale, Arizona-based Windy City Group LLC filed for Chapter 11 protection on June 18, 2008 (Bankr. D. Ariz. Case No. 08- 07274). When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million, and estimated debts of $10 million to $50 million. * S&P Says NY MTA in Short Supply of Options to Deal with Deficits ------------------------------------------------------------------ New York's Metropolitan Transportation Authority expects deficits for the foreseeable future, and its options to deal with them are in short supply, says a report published today by Standard & Poor's Ratings Services. The report, entitled "When New York's Metropolitan Transit Authority Battles Deficits, All Is Fare," says that the authority is planning on increasing fares in 2009, on top of one this year. "The preliminary budget and operating plan reflect the region's weaker economy and the effects of rising fuel costs and declining real estate tax revenues," said Standard & Poor's credit analyst Laura Macdonald. MTA is already dealing with rising debt service costs and a limited ability to look to either the city or the state for further financial assistance, given their own funding problems. "The authority has traditionally been able to control shortfalls through a variety of measures. As in the past, MTA is projecting deficits and is faced with limited options to balance its budget," Ms. Macdonald added. On July 23, MTA management presented to its board of directors its preliminary 2009 budget and operating plan for fiscals 2010-2012. This is the first time the MTA is forecasting operating results for fiscal 2012. The governor has appointed a commission to study the agency's finances in hopes of finding a long-term solution, but that report isn't expected until November 2008. * Fitch Reviews & Holds All Outstanding Dealer Floorplan ABS Notes ------------------------------------------------------------------ Fitch Ratings conducted its annual review of all outstanding U.S. dealer floorplan asset-backed securities and affirmed all outstanding dealer floorplan notes. Fitch will release an annual dealer floorplan research report early next week detailing the structure and performance of the 18 outstanding series issued by the six trusts listed below. The report will provide an overview of the dealer floorplan ABS sector, details transaction mechanics, describe key performance variables, summarize performance trends, and discusses Fitch's outlook for the sector for the remainder of 2008. Based on the performance of the transactions, Fitch affirmed the following classes of notes listed below: CNH Wholesale Master Owner Trust: -- Series 2006-1 class A notes at 'AAA'; -- Series 2006-1 class B notes at 'A'. DaimlerChrysler Master Owner Trust: -- Series 2005-C term notes at 'AAA'; -- Series 2006-A term notes at 'AAA'. Ford Credit Floorplan Master Owner Trust A: -- Series 2006-3 class A notes at 'AAA'; -- Series 2006-3 class B notes at 'A'; -- Series 2006-4 class A notes at 'AAA'; -- Series 2006-4 class B notes at 'A'. GE Dealer Floorplan Master Note Trust: -- Series 2005-2 class A notes at 'AAA'; -- Series 2005-2 class B notes at 'A'; -- Series 2005-2 class C notes at 'BBB'; -- Series 2006-1 class A notes at 'AAA'; -- Series 2006-1 class B notes at 'A'; -- Series 2006-1 class C notes at 'BBB'; -- Series 2006-2 class A notes at 'AAA'; -- Series 2006-2 class B notes at 'A'; -- Series 2006-2 class C notes at 'BBB'; -- Series 2006-3 class A notes at 'AAA'; -- Series 2006-3 class B notes at 'A'; -- Series 2006-3 class C notes at 'BBB'; -- Series 2006-4 class A notes at 'AAA'; -- Series 2006-4 class B notes at 'A'; -- Series 2006-4 class C notes at 'BBB'; -- Series 2007-1 class A notes at 'AAA'; -- Series 2007-1 class B notes at 'A'; -- Series 2007-1 class C notes at 'BBB'; -- Series 2007-2 class A notes at 'AAA'; -- Series 2007-2 class B notes at 'A'; -- Series 2007-2 class C notes at 'BBB'. Superior Wholesale Inventory Financing Trust (SWIFT): -- SWIFT VIII series 2003-A term notes at 'AAA'; -- SWIFT VIII series 2003-A term certificates at 'A+'; -- SWIFT VIII series 2004-A term notes at 'AAA'; -- SWIFT X series 2004-A class A notes at 'AAA'; -- SWIFT X series 2004-A class B notes at 'A'; -- SWIFT X series 2004-A class C notes at 'BBB'; -- SWIFT XI series 2005-A class A notes at 'AAA'; -- SWIFT XI series 2005-A class B notes at 'A'; -- SWIFT XI series 2005-A class C notes at 'BBB+'; -- SWIFT XI series 2005-A class D notes at 'BB+'; -- SWIFT 2007-AE-1 class A notes at 'AAA'; -- SWIFT 2007-AE-1 class B notes at 'A+'; -- SWIFT 2007-AE-1 class C notes at 'BBB+'; -- SWIFT 2007-AE-1 class D notes at 'BB+'. SWIFT Master Auto Receivables Trust (SMART): -- SMART series 2007-2 class A notes at 'AAA'; -- SMART series 2007-2 class B notes at 'A+'; -- SMART series 2007-2 class C notes at 'BBB+'; -- SMART series 2007-2 class D notes at 'BB+'; -- SMART series 2007-2 class E notes at 'NR'. (NR - Not Rated) * S&P: Investment-Grade Composite Credit Spread Higher at 256 Bps ----------------------------------------------------------------- Standard & Poor's U.S. investment-grade composite credit spread is currently elevated at 256 basis points, almost 30% wider than at the beginning of the year. With continued pressure on financial institutions and banks, investment-grade credit spreads are expected to remain range-bound at present, high levels. Standard & Poor's U.S. speculative-grade composite credit spread is elevated at 721 bps, 9 bps tighter than yesterday's spread but 70% wider than the five-year moving average. Speculative-grade credit spreads are poised for continued volatility, commensurate with an escalation in speculative-grade defaults over the course of this year. * S&P Still Expects a Mild, But Long Recession ---------------------------------------------- S&P still expects a mild, but long, recession, said Standard & Poor's Senior Economist Beth Ann Bovino in a Web cast. And while housing starts saw signs of life in June, a change in government code largely explains the good news. Although industrial production was surprisingly strong, post-strike production helped explain the bounce. The stimulus payments came out earlier than expected and appear to have been spent more quickly than expected, which has helped the economy. However, higher oil prices have increased the squeeze on consumers, and financial markets remain tighter than anticipated. The result will be that the recession comes a bit later than Standard & Poor's originally expected but it is still coming. Standard & Poor's expects the Fed to move quickly to raise rates once the risk of recession seems past but doesn't expect them to be certain of that until mid 2009. * S&P Chips Ratings on 71 Tranches from 81 Cash Flow & Hybrid CDOs ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 71 tranches from 18 U.S. cash flow and hybrid collateralized debt obligation transactions. S&P removed 53 of the lowered ratings from CreditWatch with negative implications. At the same time, S&P affirmed its 'AAA' rating on Ischus Mezzanine CDO IV Ltd. and removed it from CreditWatch with negative implications. The ratings on 18 of the downgraded tranches remain on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. The CreditWatch placements primarily affect transactions for which a significant portion of the collateral assets currently have ratings on CreditWatch negative or have significant exposure to assets rated in the 'CCC' category. The 71 downgraded U.S. cash flow and hybrid tranches have a total issuance amount of $13.413 billion. Eight of the 18 affected transactions are high-grade structured finance CDOs of asset- backed securities, which are CDOs collateralized at origination primarily by 'AAA' through 'A' rated tranches of residential mortgage-backed securities and other SF securities. The other 10 transactions are mezzanine SF CDOs of ABS, which are collateralized in large part by mezzanine tranches of RMBS and other SF securities. The CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS securities. At the same time, S&P lowered its ratings on two tranches from two U.S. synthetic CDO transactions. The rating on one of the downgraded tranches remains on CreditWatch negative. The two downgraded U.S. synthetic CDO tranches have a total issuance amount of $170 million. To date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P have lowered its ratings on 3,428 tranches from 817 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 1,688 ratings from 530 transactions are currently on CreditWatch negative for the same reasons. In all, we have downgraded $375.844 billion of CDO issuance. Additionally, S&P's ratings on $50.808 billion in securities have not been lowered but are currently on CreditWatch negative, indicating a high likelihood of future downgrades. Rating Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Alpha Mezz CDO 2007-1 Ltd SupSrSwap B-/Watch Neg A+/Watch Neg Alpha Mezz CDO 2007-1 Ltd II CC BB+/Watch Neg Alpha Mezz CDO 2007-1 Ltd III CC B+/Watch Neg Alpha Mezz CDO 2007-1 Ltd IV CC B+/Watch Neg Alpha Mezz CDO 2007-1 Ltd V CC CCC+/Watch Neg Ballyrock ABS CDO 2007-1 Ltd. A-1a BB/Watch Neg AAA/Watch Neg Ballyrock ABS CDO 2007-1 Ltd. A-1b CCC/Watch Neg BBB/Watch Neg Ballyrock ABS CDO 2007-1 Ltd. S B-/Watch Neg AA/Watch Neg Ballyrock ABS CDO 2007-1 Ltd. A-2 CC BB-/Watch Neg Ballyrock ABS CDO 2007-1 Ltd. B CC B-/Watch Neg Ballyrock ABS CDO 2007-1 Ltd. C CC CCC/Watch Neg Brookville CDO I Ltd. A-1 CCC-/Watch Neg BB-/Watch Neg Brookville CDO I Ltd. A-2 CC CCC/Watch Neg Coliseum SPC Chalfont 2007-1 Segregated Portfolio Notes CCC+ BBB-/Watch Neg Coliseum SPC US $120,000,000 Floating Rate Notes FACTS 2007-I Notes B-/Watch Neg A+/Watch Neg Commodore CDO V Ltd. A1A B- BBB/Watch Neg Commodore CDO V Ltd. A1B B- BBB/Watch Neg Commodore CDO V Ltd. A2 CC BB+/Watch Neg Commodore CDO V Ltd. A3 CC BB-/Watch Neg Commodore CDO V Ltd. B CC CCC-/Watch Neg E*Trade ABS CDO VI Ltd. A-1S CCC-/Watch Neg B/Watch Neg E*Trade ABS CDO VI Ltd. A-1J CC CCC+/Watch Neg E*Trade ABS CDO VI Ltd. A-2 CC CCC-/Watch Neg Euler ABS CDO I Ltd. A-1 B- A-/Watch Neg Euler ABS CDO I Ltd. A-2 CCC- BB+/Watch Neg Euler ABS CDO I Ltd. A-3 CC B/Watch Neg Euler ABS CDO I Ltd. B CC B-/Watch Neg Euler ABS CDO I Ltd. C CC CCC+/Watch Neg Euler ABS CDO I Ltd. D CC CCC/Watch Neg Euler ABS CDO I Ltd. E CC CCC/Watch Neg Euler ABS CDO I Ltd. F CC CCC-/Watch Neg High Grade Structured Credit CDO 2007-1 CP CCC-/C/Watch Neg BB+/B/WatchNeg High Grade Structured Credit CDO 2007-1 A-2 CC B/Watch Neg High Grade Structured Credit CDO 2007-1 A-3 CC CCC-/Watch Neg High Grade Structured Credit CDO 2007-1 A-1A CCC-/C/Watch Neg BB+/B/WatchNeg High Grade Structured Credit CDO 2007-1 A-1B CCC-/Watch Neg BB+/Watch Neg Highridge ABS CDO II Ltd. A-1S BB+/Watch Neg AA+/Watch Neg Highridge ABS CDO II Ltd. A-1J CCC/Watch Neg B+/Watch Neg Highridge ABS CDO II Ltd. A-2 CC B/Watch Neg Highridge ABS CDO II Ltd. A-3 CC B-/Watch Neg Highridge ABS CDO II Ltd. B CC CCC-/Watch Neg Ischus Mezzanine CDO IV Ltd. SprSrSwap BBBsrs A+srs/WatchNeg Ischus Mezzanine CDO IV Ltd. A-1 CCC BBB-/Watch Neg Ischus Mezzanine CDO IV Ltd. A-2 CC B/Watch Neg Ischus Mezzanine CDO IV Ltd. A-3 CC CCC+/Watch Neg Jupiter High Grade CDO VII Ltd. A-1 CCC-/Watch Neg BB/Watch Neg Jupiter High Grade CDO VII Ltd. A-2 CC CCC+/Watch Neg Jupiter High Grade CDO VII Ltd. A-3 CC CCC-/Watch Neg Jupiter High-Grade CDO V Ltd. A-2 CC CCC-/Watch Neg Kleros Preferred Funding III Ltd. A-1 CC CCC/Watch Neg Kleros Preferred Funding III Ltd. A-2 CC CCC-/Watch Neg Kleros Real Estate CDO II Ltd. A-1A B-/Watch Neg BB/Watch Neg Kleros Real Estate CDO II Ltd. A-1B CC CCC+/Watch Neg Kleros Real Estate CDO II Ltd. A-2 CC CCC/Watch Neg Kleros Real Estate CDO II Ltd. B CC CCC-/Watch Neg Maxim High Grade CDO I Ltd. A1 CCC-/Watch Neg B/Watch Neg Maxim High Grade CDO I Ltd. A2 CC CCC/Watch Neg Maxim High Grade CDO I Ltd. A3 CC CCC-/Watch Neg Pacific Pinnacle CDO Ltd. A-1LA B/Watch Neg BBB/Watch Neg Pacific Pinnacle CDO Ltd. A-1LB CCC-/Watch Neg CCC+/Watch Neg Pacific Pinnacle CDO Ltd. A-1LC CC CCC-/Watch Neg Palmer ABS CDO 2007-1 Ltd. A-1 CC B/Watch Neg Stack 2006-1 Ltd. I B- BBB-/Watch Neg Stack 2006-1 Ltd. II CCC BB/Watch Neg Stack 2006-1 Ltd. III CC B+/Watch Neg Stack 2006-1 Ltd. IV CC B/Watch Neg Stack 2006-1 Ltd. V CC CCC+/Watch Neg Stack 2006-1 Ltd. VI CC CCC-/Watch Neg Stillwater ABS CDO 2006-1 Ltd. A-1 B+/Watch Neg AA-/Watch Neg Stillwater ABS CDO 2006-1 Ltd. A-2 CCC-/Watch Neg BB/Watch Neg Stillwater ABS CDO 2006-1 Ltd. A-3 CC B-/Watch Neg Stillwater ABS CDO 2006-1 Ltd. B CC CCC+/Watch Neg Stillwater ABS CDO 2006-1 Ltd. C CC CCC/Watch Neg Rating Affirmed and Removed from Creditwatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- Ischus Mezzanine CDO IV Ltd. X AAA AAA/Watch Neg * Moody's: Support to Fannie Mae and Freddie Mac Proves Resiliency ------------------------------------------------------------------ While providing assistance to Fannie Mae and Freddie Mac might test the resiliency of the U.S. government balance sheet, it would not endanger the U.S. government's strong Aaa rating, according to a special report by Moody's Investors Service. Other risks, such as more bank failures and their effect on the FDIC, could potentially also weaken the government's balance sheet, although this is not now Moody's forecast. "This report looks at the numbers involved, including a stress scenario, to conclude that the prospective issuance of bonds by the Treasury to cover Fannie and Freddie's losses would result in a only small percentage increase in gross bond issuance, and a relatively small increase in federal government debt" Steven Hess, Moody's vice president and author of the report, said . "The two agencies are considered contingent liabilities of the government by Moody's not necessarily because of their legal status as government-sponsored enterprises but because of their size--'too big to fail'—-and the socio-economic role they play in the housing market," Mr. Hess continued. While the risk of Fannie and Freddie is not considered to pose a threat to the U.S. government's bond rating, other tests of the resiliency of the U.S. government balance sheet come from the health of the financial system more generally, especially resulting from the weak housing market. The failure of any large financial institutions and the solvency of the FDIC are among those risks, although at this time Moody's does not expect these to materialize. Mr. Hess said the level of debt is not the most important indicator of the creditworthiness of Aaa-rated countries, which can usually support a higher level of debt than other countries. Other attributes of top-rated countries include a high degree of economic resilience, government balance-sheet flexibility, strong and credible institutions, and unquestioned government access to finance, including under plausible stress scenarios. Thus, although it is difficult to quantify the contingent liabilities resulting from increased risks, there is a high degree of balance- sheet flexibility to deal with them. The on-balance-sheet liabilities of the two mortgage finance companies total about $800 billion each, while their guarantee portfolios together total $3.9 trillion, bringing total liabilities and guarantees to $5.5 trillion. This is slightly larger than the existing federal government debt held by the public, which is $5.3 trillion. Moody's believes only a small portion of these liabilities, if any, will be transferred to the government's balance sheet. The report offers a stress scenario--much higher than Moody's baseline scenario or the recently release Congressional Budget Office estimate of $25 billion in losses--of cumulative credit losses approaching $200 billion, which would equate to approximately 5% of the their combined guarantee portfolios. "Losses of $200 billion are outside any realistic stress scenario evaluated by Moody's financial institutions analysts, but we nonetheless looked at a number eight times higher than the CBO's figure to see what it would mean for government finance," Mr. Hess said. If the Treasury were to issue $200 billion in bonds to finance all of the Fannie Mae and Freddie Mac's losses under the stress scenario, this would increase the ratio of gross federal government debt to GDP from 36.5% to 38.1%, a small increase in already moderate levels. The ratio of debt to revenue, which Moody's considers an important indicator in government financial analysis, would increase from 207.6% to 215.4%. While potential increased debt as a result of assistance to Fannie and Freddie is manageable, the other risks to the government's balance sheet remain. At this time, they don't look likely to be realized, but Moody's believes the government has enough financial flexibility to deal with these risks and maintain its Aaa rating. * Lodging Industry Feels Pressure as People Cuts Travel Spending ---------------------------------------------------------------- The trouble that high oil prices has brought to many industries has now reached the U.S. lodging sector. People are now cutting on travel in response to record prices in commodities, leaving many lodging companies vacant, reports say. Marriott International Inc. Marriott International Inc. and Starwood Hotels & Resorts Worldwide Inc. have already felt the pressure. Melinda Peer of Forbes reports that J.W. Marriott, Jr., chairman of Marriott International, has admitted that the industry was beginning to see a significant drop in corporate demand. In mid July Marriott International reported a 24% drop in profit to $157 million and predicts a lower yearly profit again. It also predicts a 1 percent decrease in U.S. revenue per available room (RevPAR) this year. According to Michael S. Rosenwald of the Washington Post, says that in the boom years starting in 2004, revenue per available room, or RevPar, jumped as much as 10 percent. Mr. Rosenwald reported that Thomas Baltimore, the president of Bethesda's RLJ Development, one of the largest owners of Marriott hotels, said Marriott's forecast of potentially negative revenue per available room growth "is a reasonable assumption based on what we know." Marriott fared better internationally, posting RevPar growth of 15 percent. Starwood Hotels & Resorts Worldwide Starwood Hotels & Resorts Worldwide on Thursday reported earnings of $105 million, or 56 cents a share, in the second quarter, down from $145 million, or 67 cents a share. Its RevPAR in North America was up 3%. Including international figures, reported RevPAR 9.6% higher. "While international lodging demand remains solid, the economic picture in the U.S. has continued to deteriorate, with lodging demand dropping significantly in May," Starwood CEO Frits van Paasschen said in the earnings report. Mr. Rosenwald also reported a decline in share value of Silver Spring's Choice Hotels International and InterContinental Hotels Group. * Proskauer Rose-Los Angeles Adds Andrew M. Katzenstein as Partner ------------------------------------------------------------------ Andrew M. Katzenstein has joined Proskauer Rose LLP's Los Angeles office as a partner in the Personal Planning Department and a member of its new Fiduciary Litigation Practice Group. "[Mr. Katzenstein] is a superb lawyer with a sterling reputation." Bert H. Deixler, head of Proskauer's Los Angeles office, said. "He will be a key strategic component of the continued growth of our Los Angeles office and an integral member of our cross- disciplinary team," Mr. Katzenstein focuses his practice on: estate, gift and generation-skipping tax planning; income tax issues associated with trust planning; and probate and trust administration matters, including resolving disputes between fiduciaries and beneficiaries. He also devotes a significant portion of his practice to assisting charitable organizations. "[Mr. Katzenstein] is one of the most highly regarded trusts and estates lawyers in Southern California and is a significant addition to our already formidable and extremely deep Personal Planning Department, which extends across the firm's national platform," Jay D. Waxenberg, chair of Proskauer's Personal Planning Department, said. Proskauer's Personal Planning Department works with individual clients that include business entrepreneurs, corporate executives, real estate developers, creative and performing artists, owners of sports franchises, collectors of fine arts and investors in securities, including those with multi-jurisdictional holdings. Mr. Katzenstein joins Proskauer from Katten Muchin Rosenman LLP, where he was a partner in the Los Angeles office. In addition to his legal practice, he teaches Estate Tax at UCLA Law School and is a frequent lecturer on a variety of estate planning and tax- related topics for the Los Angeles County, Beverly Hills and California State Bar Associations. He received his LL.M. from the University of San Diego, his J.D. from the University of Michigan Law School and his B.A. from the University of Michigan. Mr. Katzenstein is the latest partner to join the firm's Los Angeles office, which recently announced the addition of James C. Williams, a veteran employee benefits and executive compensation lawyer. The firm's Los Angeles office was also named one of the "Top 10 Southern California Corporate/Transactional Firms" by the Daily Journal, where it was noted for having one of the fastest growing transactional practices in the area. About Proskauer Rose Proskauer Rose LLP, -- http://www.proskauer.com/-- founded in 1875, is an international law firm providing legal services to clients worldwide from offices in Boca Raton, Boston, Chicago, London, Los Angeles, New Orleans, New York, Newark, Paris, Sao Paulo, and Washington, D.C. The firm has experience in all areas of practice important to businesses and individuals including corporate finance, mergers and acquisitions, general commercial litigation, corporate governance matters, conducting internal corporate investigations, white collar criminal defense, private equity and fund formation, patent and intellectual property litigation and prosecution, labor and employment law, real estate transactions, bankruptcy and reorganizations, trusts and estates, and taxation. Its clients span industries including chemicals, entertainment, financial services, health care, information technology, insurance, internet, lodging and gaming, manufacturing, media and communications, pharmaceuticals, real estate investment, sports, and transportation. The firm has more than 750 lawyers worldwide. * Christopher Marcus of Weil Gotshal Joins Kirkland & Ellis ----------------------------------------------------------- Lindsay Fortado of Bloomberg News reports that Christopher Marcus, a partner at Weil, Gotshal & Manges LLC, has joined restructuring group Kirkland & Ellis LLP. According to Bloomberg, Mr. Marcus engaged in the bankruptcy of WorldCom Inc., Footstar Inc., Silicon Graphics Inc. and Lexington Precision Corp. He also advised creditors in the bankruptcy cases of Calpine Corp., the report adds. Kirkland & Ellis is working on several largest bankruptcy filing including Tropicana Entertainment LLC, Sirva Inc., Wellman Inc., Leiner Health Products, Kimbal Hill Inc. and Tousa Inc., the report relates. On the other hand, Weil Gotshal is representing SemGroup LP who filed for protection under Chapter 11 on July 22, 2008, the report notes. As reported in the Troubled Company Reporter on July 24, 2008, SemGroup listed total asset of $5,429,038,000 and total debts of $5,033,214,000. "We are busy with several significant restructurings this year," Bloomberg quoted Richard Cieri, a senior partner at Kirkland as saying. "The addition will allow us to continue to take on these complex matters." Weil Gotshal spokesman, Mike Ford, told Bloomberg that it isn't surprising that other continue to try and recruit lawyers from his firm. About Weil, Gotshal & Manges Weil, Gotshal & Manges LLP is an international law firm of over 1,100 lawyers, including approximately 300 partners. Weil Gotshal is headquartered in New York, with offices in Austin, Boston, Brussels, Budapest, Dallas, Frankfurt, Houston, London, Miami, Munich, Paris, Prague, Providence, Shanghai, Silicon Valley, Singapore, Warsaw, Washington DC and Wilmington. Comprised of over 100 attorneys, Weil Gotshal's Business Finance and Restructuring Department ranks with the largest among U.S. law firms, and has been involved in virtually every major bankruptcy case over the last decade, including ENRON, Parmalat, WorldCom, Global Crossing, and many others. Lawyers in the group have been recognized by Chambers Global and other leading authorities as the gold standard in the Bankruptcy field year after year, as has the practice itself. About Kirkland & Ellis Kirkland & Ellis LLP is a 900-attorney law firm representing global clients in complex litigation, dispute resolution and arbitration, corporate and tax, workout, insolvency and bankruptcy, and intellectual property and technology matters. The Firm has offices in Washington, Chicago, London, Los Angeles, New York and San Francisco. * BOND PRICING: For the Week of July 21 to July 25, 2008 -------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC RAIL PRODUCT 10.500% 1/15/2004 0 ABC RAIL PRODUCT 10.500% 12/31/2004 100 ADVANTA CAP TR 8.990% 12/17/2026 60 AIRTRAN HOLDINGS 7.000% 7/1/2023 63 ALERIS INTL INC 10.000% 12/15/2016 73 ALESCO FINANCIAL 7.625% 5/15/2027 55 ALION SCIENCE 10.250% 2/1/2015 72 ALLEGIANCE TEL 11.750% 2/15/2008 7 ALLEGIANCE TEL 12.875% 5/15/2008 7 AM AIRLN EQ TRST 10.680% 3/4/2013 62 AM AIRLN PT TRST 7.377% 5/23/2019 53 AM AIRLN PT TRST 7.379% 5/23/2016 63 AM AIRLN PT TRST 9.730% 9/29/2014 50 AM AIRLN PT TRST 10.180% 1/2/2013 62 AMBAC INC 5.950% 12/5/2035 40 AMBAC INC 6.150% 2/7/2087 23 AMBASSADORS INTL 3.750% 4/15/2027 53 AMD 5.750% 8/15/2012 66 AMD 6.000% 5/1/2015 57 AMD 6.000% 5/1/2015 56 AMER & FORGN PWR 5.000% 3/1/2030 50 AMER AXLE & MFG 5.250% 2/11/2014 66 AMER AXLE & MFG 7.875% 3/1/2017 68 AMER COLOR GRAPH 10.000% 6/15/2010 35 AMERICREDIT CORP 0.750% 9/15/2011 59 AMERICREDIT CORP 2.125% 9/15/2013 58 AMES TRUE TEMPER 10.000% 7/15/2012 58 AMR CORP 9.000% 8/1/2012 54 AMR CORP 9.000% 9/15/2016 59 AMR CORP 9.750% 8/15/2021 48 AMR CORP 9.800% 10/1/2021 42 AMR CORP 9.880% 6/15/2020 54 AMR CORP 10.000% 4/15/2021 38 AMR CORP 10.150% 5/15/2020 50 AMR CORP 10.200% 3/15/2020 54 AMR CORP 10.420% 3/15/2011 49 AMR CORP 10.450% 3/10/2011 50 ANTIGENICS 5.250% 2/1/2025 62 ASHTON WOODS USA 9.500% 10/1/2015 60 ASPECT MEDICAL 2.500% 6/15/2014 56 ATHEROGENICS INC 1.500% 2/1/2012 5 ATHEROGENICS INC 4.500% 3/1/2011 11 AVENTINE RENEW 10.000% 4/1/2017 64 BALLY TOTAL FITN 13.000% 7/15/2011 48 BANK NEW ENGLAND 8.750% 4/1/1999 8 BANK NEW ENGLAND 9.500% 2/15/1996 17 BANK NEW ENGLAND 9.875% 9/15/1999 7 BANKUNITED CAP 3.125% 3/1/2034 41 BBN CORP 6.000% 4/1/2012 0 BEARINGPOINT INC 3.100% 12/15/2024 30 BEAZER HOMES USA 6.875% 7/15/2015 70 BELL MICROPRODUC 3.750% 3/5/2024 70 BERRY PLASTICS 10.250% 3/1/2016 65 BON-TON DEPT STR 10.250% 3/15/2014 55 BORDEN INC 7.875% 2/15/2023 53 BORDEN INC 8.375% 4/15/2016 45 BORDEN INC 9.200% 3/15/2021 69 BORLAND SOFTWARE 2.750% 2/15/2012 69 BOWATER INC 6.500% 6/15/2013 60 BOWATER INC 9.375% 12/15/2021 64 BOYD GAMING CORP 6.750% 4/15/2014 69 BRODER BROS CO 11.250% 10/15/2010 70 BUDGET GROUP INC 9.125% 4/1/2006 0 BURLINGTON NORTH 3.200% 1/1/2045 55 CAPITALSOURCE 3.500% 7/15/2034 70 CCH I LLC 9.920% 4/1/2014 51 CCH I LLC 10.000% 5/15/2014 52 CCH I LLC 11.125% 1/15/2014 62 CD RADIO INC 8.750% 9/29/2009 5 CELL THERAPEUTIC 5.750% 12/15/2011 21 CHAMPION ENTERPR 2.750% 11/1/2037 51 CHARMING SHOPPES 1.125% 5/1/2014 67 CHARTER COMM HLD 11.125% 1/15/2011 70 CHARTER COMM LP 5.875% 11/16/2009 64 CHARTER COMM LP 6.500% 10/1/2027 41 CHENIERE ENERGY 2.250% 8/1/2012 35 CIT GROUP INC 5.000% 2/13/2014 68 CIT GROUP INC 5.000% 2/1/2015 67 CIT GROUP INC 5.100% 3/15/2015 55 CIT GROUP INC 5.100% 9/15/2015 55 CIT GROUP INC 5.125% 9/30/2014 67 CIT GROUP INC 5.250% 9/15/2014 68 CIT GROUP INC 5.300% 8/15/2014 61 CIT GROUP INC 5.400% 1/30/2016 68 CIT GROUP INC 5.650% 7/15/2014 63 CIT GROUP INC 5.650% 2/13/2017 69 CIT GROUP INC 5.700% 12/15/2016 59 CIT GROUP INC 5.700% 12/15/2016 60 CIT GROUP INC 5.750% 3/15/2017 68 CIT GROUP INC 5.800% 12/15/2016 58 CIT GROUP INC 5.850% 9/15/2016 71 CIT GROUP INC 5.850% 3/15/2022 56 CIT GROUP INC 5.900% 3/15/2022 55 CIT GROUP INC 5.950% 9/15/2016 69 CIT GROUP INC 5.950% 2/15/2022 65 CIT GROUP INC 6.000% 11/15/2016 58 CIT GROUP INC 6.000% 2/15/2022 53 CIT GROUP INC 6.000% 5/15/2022 54 CIT GROUP INC 6.000% 4/1/2036 62 CIT GROUP INC 6.050% 9/15/2016 55 CIT GROUP INC 6.100% 6/15/2016 60 CIT GROUP INC 6.100% 3/15/2067 42 CIT GROUP INC 6.150% 9/15/2021 51 CIT GROUP INC 6.250% 9/15/2021 52 CIT GROUP INC 6.250% 11/15/2021 54 CITIZENS UTIL CO 7.050% 10/1/2046 67 CLAIRE'S STORES 9.250% 6/1/2015 51 CLAIRE'S STORES 9.625% 6/1/2015 41 CLAIRE'S STORES 10.500% 6/1/2017 39 CLEAR CHANNEL 4.900% 5/15/2015 54 CLEAR CHANNEL 5.000% 3/15/2012 67 CLEAR CHANNEL 5.500% 9/15/2014 56 CLEAR CHANNEL 5.500% 12/15/2016 54 CLEAR CHANNEL 5.750% 1/15/2013 65 CLEAR CHANNEL 6.875% 6/15/2018 56 CLEAR CHANNEL 7.250% 10/15/2027 52 COGENT COMMUNICA 1.000% 6/15/2027 58 COLLINS & AIKMAN 10.750% 12/31/2011 0 COMERICA CAP TR 6.576% 2/20/2037 66 COMPLETE MGMT 8.000% 8/15/2003 100 COMPUCREDIT 3.625% 5/30/2025 45 COMPUCREDIT 5.875% 11/30/2035 39 CONSTAR INTL 11.000% 12/1/2012 54 CONTL AIRLINES 8.750% 12/1/2011 64 DECODE GENETICS 3.500% 4/15/2011 32 DELPHI CORP 6.500% 8/15/2013 18 DELPHI CORP 8.250% 10/15/2033 1 DELTA AIR LINES 8.000% 12/1/2015 40 DENDREON CORP 4.750% 6/15/2014 70 DEX MEDIA INC 8.000% 11/15/2013 70 DILLARD DEPT STR 7.875% 1/1/2023 70 EPIX MEDICAL INC 3.000% 6/15/2024 61 EQUISTAR CHEMICA 7.550% 2/15/2026 66 EXODUS COMM INC 4.750% 7/15/2008 0 EXPRESSJET HLDS 4.250% 8/1/2023 40 FEDDERS NORTH AM 9.875% 3/1/2014 0 FIFTH THIRD BANC 4.500% 6/1/2018 70 FIFTH THIRD CAP 6.500% 4/15/2037 65 FIN SEC ASSUR 6.400% 12/15/2066 62 FINLAY FINE JWLY 8.375% 6/1/2012 36 FINOVA GROUP 7.500% 11/15/2009 11 FIRST DATA CORP 4.500% 6/15/2010 60 FIRST DATA CORP 4.700% 8/1/2013 45 FIRST DATA CORP 4.850% 10/1/2014 47 FIRST DATA CORP 4.950% 6/15/2015 42 FIRST DATA CORP 5.625% 11/1/2011 53 FIVE STAR QUALIT 3.750% 10/15/2026 65 FIVE STAR QUALIT 3.750% 10/15/2026 65 FORD HOLDINGS 9.300% 3/1/2030 55 FORD HOLDINGS 9.375% 3/1/2020 59 FORD MOTOR CO 6.375% 2/1/2029 52 FORD MOTOR CO 6.500% 8/1/2018 57 FORD MOTOR CO 6.625% 2/15/2028 45 FORD MOTOR CO 6.625% 10/1/2028 46 FORD MOTOR CO 7.125% 11/15/2025 46 FORD MOTOR CO 7.400% 11/1/2046 50 FORD MOTOR CO 7.450% 7/16/2031 56 FORD MOTOR CO 7.500% 8/1/2026 47 FORD MOTOR CO 7.700% 5/15/2097 49 FORD MOTOR CO 7.750% 6/15/2043 48 FORD MOTOR CO 8.875% 1/15/2022 52 FORD MOTOR CO 8.900% 1/15/2032 54 FORD MOTOR CO 9.215% 9/15/2021 59 FORD MOTOR CO 9.950% 2/15/2032 58 FORD MOTOR CO 9.980% 2/15/2047 62 FORD MOTOR CRED 5.000% 1/20/2011 69 FORD MOTOR CRED 5.000% 2/22/2011 69 FORD MOTOR CRED 5.200% 3/21/2011 49 FORD MOTOR CRED 5.250% 3/21/2011 66 FORD MOTOR CRED 5.250% 9/20/2011 62 FORD MOTOR CRED 5.300% 3/21/2011 64 FORD MOTOR CRED 5.350% 2/22/2011 68 FORD MOTOR CRED 5.400% 1/20/2011 68 FORD MOTOR CRED 5.400% 9/20/2011 63 FORD MOTOR CRED 5.400% 10/20/2011 67 FORD MOTOR CRED 5.400% 10/20/2011 63 FORD MOTOR CRED 5.450% 6/21/2010 69 FORD MOTOR CRED 5.450% 10/20/2011 67 FORD MOTOR CRED 5.500% 4/20/2011 67 FORD MOTOR CRED 5.500% 9/20/2011 62 FORD MOTOR CRED 5.500% 10/20/2011 68 FORD MOTOR CRED 5.600% 4/20/2011 66 FORD MOTOR CRED 5.600% 8/22/2011 63 FORD MOTOR CRED 5.600% 9/20/2011 68 FORD MOTOR CRED 5.600% 11/21/2011 68 FORD MOTOR CRED 5.600% 11/21/2011 62 FORD MOTOR CRED 5.650% 7/20/2011 64 FORD MOTOR CRED 5.650% 11/21/2011 68 FORD MOTOR CRED 5.650% 1/21/2014 55 FORD MOTOR CRED 5.700% 3/22/2010 70 FORD MOTOR CRED 5.700% 5/20/2011 69 FORD MOTOR CRED 5.700% 12/20/2011 63 FORD MOTOR CRED 5.750% 8/22/2011 66 FORD MOTOR CRED 5.750% 2/21/2012 66 FORD MOTOR CRED 5.750% 1/21/2014 50 FORD MOTOR CRED 5.750% 2/20/2014 50 FORD MOTOR CRED 5.750% 2/20/2014 56 FORD MOTOR CRED 5.800% 8/22/2011 65 FORD MOTOR CRED 5.850% 7/20/2011 66 FORD MOTOR CRED 5.850% 1/20/2012 68 FORD MOTOR CRED 5.900% 2/21/2012 59 FORD MOTOR CRED 5.900% 2/20/2014 53 FORD MOTOR CRED 6.000% 1/20/2012 63 FORD MOTOR CRED 6.000% 1/21/2014 58 FORD MOTOR CRED 6.000% 3/20/2014 54 FORD MOTOR CRED 6.000% 3/20/2014 53 FORD MOTOR CRED 6.000% 3/20/2014 55 FORD MOTOR CRED 6.000% 3/20/2014 53 FORD MOTOR CRED 6.000% 11/20/2014 50 FORD MOTOR CRED 6.000% 11/20/2014 52 FORD MOTOR CRED 6.000% 11/20/2014 50 FORD MOTOR CRED 6.000% 1/20/2015 53 FORD MOTOR CRED 6.000% 2/20/2015 57 FORD MOTOR CRED 6.050% 2/20/2014 50 FORD MOTOR CRED 6.050% 3/20/2014 55 FORD MOTOR CRED 6.050% 4/21/2014 55 FORD MOTOR CRED 6.050% 12/22/2014 53 FORD MOTOR CRED 6.050% 12/22/2014 59 FORD MOTOR CRED 6.050% 2/20/2015 47 FORD MOTOR CRED 6.100% 6/20/2011 70 FORD MOTOR CRED 6.100% 2/20/2015 51 FORD MOTOR CRED 6.150% 12/22/2014 49 FORD MOTOR CRED 6.150% 1/20/2015 56 FORD MOTOR CRED 6.200% 5/20/2011 69 FORD MOTOR CRED 6.200% 6/20/2011 66 FORD MOTOR CRED 6.200% 4/21/2014 58 FORD MOTOR CRED 6.200% 3/20/2015 50 FORD MOTOR CRED 6.250% 6/20/2011 69 FORD MOTOR CRED 6.250% 6/20/2011 65 FORD MOTOR CRED 6.250% 2/21/2012 64 FORD MOTOR CRED 6.250% 12/20/2013 51 FORD MOTOR CRED 6.250% 12/20/2013 6 FORD MOTOR CRED 6.250% 4/21/2014 60 FORD MOTOR CRED 6.250% 1/20/2015 53 FORD MOTOR CRED 6.250% 3/20/2015 53 FORD MOTOR CRED 6.300% 5/20/2014 54 FORD MOTOR CRED 6.300% 5/20/2014 60 FORD MOTOR CRED 6.350% 4/21/2014 57 FORD MOTOR CRED 6.500% 12/20/2013 55 FORD MOTOR CRED 6.500% 2/20/2015 58 FORD MOTOR CRED 6.500% 3/20/2015 50 FORD MOTOR CRED 6.520% 3/10/2013 58 FORD MOTOR CRED 6.550% 12/20/2013 59 FORD MOTOR CRED 6.550% 7/21/2014 54 FORD MOTOR CRED 6.600% 10/21/2013 56 FORD MOTOR CRED 6.650% 10/21/2013 60 FORD MOTOR CRED 6.650% 6/20/2014 54 FORD MOTOR CRED 6.750% 10/21/2013 58 FORD MOTOR CRED 6.750% 6/20/2014 54 FORD MOTOR CRED 6.800% 6/20/2014 55 FORD MOTOR CRED 6.800% 6/20/2014 53 FORD MOTOR CRED 6.800% 3/20/2015 51 FORD MOTOR CRED 6.850% 9/20/2013 62 FORD MOTOR CRED 6.850% 5/20/2014 55 FORD MOTOR CRED 6.850% 6/20/2014 54 FORD MOTOR CRED 6.950% 5/20/2014 55 FORD MOTOR CRED 7.000% 11/26/2011 67 FORD MOTOR CRED 7.000% 8/15/2012 60 FORD MOTOR CRED 7.050% 9/20/2013 59 FORD MOTOR CRED 7.100% 9/20/2013 59 FORD MOTOR CRED 7.100% 9/20/2013 60 FORD MOTOR CRED 7.250% 7/20/2017 58 FORD MOTOR CRED 7.250% 7/20/2017 70 FORD MOTOR CRED 7.300% 4/20/2015 51 FORD MOTOR CRED 7.350% 5/15/2012 65 FORD MOTOR CRED 7.350% 9/15/2015 59 FORD MOTOR CRED 7.400% 8/21/2017 59 FORD MOTOR CRED 7.500% 8/20/2032 67 FORD MOTOR CRED 7.900% 5/18/2015 62 FRANKLIN BANK 4.000% 5/1/2027 28 FREMONT GEN CORP 7.875% 3/17/2009 50 FRONTIER AIRLINE 5.000% 12/15/2025 29 GENERAL MOTORS 6.750% 5/1/2028 48 GENERAL MOTORS 7.125% 7/15/2013 60 GENERAL MOTORS 7.200% 1/15/2011 73 GENERAL MOTORS 7.375% 5/23/2048 48 GENERAL MOTORS 7.400% 9/1/2025 49 GENERAL MOTORS 7.700% 4/15/2016 56 GENERAL MOTORS 8.100% 6/15/2024 54 GENERAL MOTORS 8.250% 7/15/2023 56 GENERAL MOTORS 8.375% 7/15/2033 58 GENERAL MOTORS 8.800% 3/1/2021 58 GENERAL MOTORS 9.400% 7/15/2021 60 GENERAL MOTORS 9.450% 11/1/2011 60 GEORGIA GULF CRP 10.750% 10/15/2016 50 GLOBAL INDUS LTD 2.750% 8/1/2027 69 GLOBALSTAR INC 5.750% 4/1/2028 54 GMAC 5.250% 1/15/2014 43 GMAC 5.350% 1/15/2014 45 GMAC 5.700% 6/15/2013 44 GMAC 5.700% 10/15/2013 45 GMAC 5.700% 12/15/2013 46 GMAC 5.750% 1/15/2014 47 GMAC 5.850% 5/15/2013 55 GMAC 5.850% 6/15/2013 41 GMAC 5.850% 6/15/2013 51 GMAC 5.850% 6/15/2013 45 GMAC 5.900% 12/15/2013 66 GMAC 5.900% 12/15/2013 48 GMAC 5.900% 1/15/2019 42 GMAC 5.900% 1/15/2019 47 GMAC 5.900% 2/15/2019 46 GMAC 5.900% 10/15/2019 43 GMAC 6.000% 7/15/2013 48 GMAC 6.000% 11/15/2013 41 GMAC 6.000% 12/15/2013 43 GMAC 6.000% 2/15/2019 43 GMAC 6.000% 2/15/2019 43 GMAC 6.000% 2/15/2019 43 GMAC 6.000% 3/15/2019 42 GMAC 6.000% 3/15/2019 43 GMAC 6.000% 3/15/2019 42 GMAC 6.000% 3/15/2019 42 GMAC 6.000% 3/15/2019 42 GMAC 6.000% 4/15/2019 45 GMAC 6.000% 9/15/2019 45 GMAC 6.000% 9/15/2019 44 GMAC 6.050% 8/15/2019 41 GMAC 6.050% 8/15/2019 42 GMAC 6.050% 10/15/2019 44 GMAC 6.100% 11/15/2013 44 GMAC 6.100% 9/15/2019 39 GMAC 6.125% 10/15/2019 43 GMAC 6.150% 9/15/2013 80 GMAC 6.150% 11/15/2013 48 GMAC 6.150% 12/15/2013 42 GMAC 6.150% 8/15/2019 44 GMAC 6.150% 9/15/2019 44 GMAC 6.150% 10/15/2019 43 GMAC 6.200% 11/15/2013 51 GMAC 6.200% 4/15/2019 45 GMAC 6.250% 3/15/2013 45 GMAC 6.250% 7/15/2013 45 GMAC 6.250% 10/15/2013 46 GMAC 6.250% 11/15/2013 46 GMAC 6.250% 12/15/2018 46 GMAC 6.250% 1/15/2019 45 GMAC 6.250% 4/15/2019 42 GMAC 6.250% 5/15/2019 44 GMAC 6.250% 7/15/2019 40 GMAC 6.300% 3/15/2013 48 GMAC 6.300% 10/15/2013 51 GMAC 6.300% 11/15/2013 47 GMAC 6.300% 8/15/2019 40 GMAC 6.300% 8/15/2019 43 GMAC 6.350% 5/15/2013 43 GMAC 6.350% 4/15/2019 42 GMAC 6.350% 7/15/2019 43 GMAC 6.350% 7/15/2019 41 GMAC 6.375% 8/1/2013 59 GMAC 6.375% 1/15/2014 43 GMAC 6.400% 3/15/2013 48 GMAC 6.400% 12/15/2018 43 GMAC 6.400% 11/15/2019 42 GMAC 6.400% 11/15/2019 42 GMAC 6.450% 2/15/2013 48 GMAC 6.500% 7/15/2012 49 GMAC 6.500% 2/15/2013 48 GMAC 6.500% 3/15/2013 47 GMAC 6.500% 4/15/2013 47 GMAC 6.500% 5/15/2013 50 GMAC 6.500% 6/15/2013 43 GMAC 6.500% 8/15/2013 45 GMAC 6.500% 11/15/2013 47 GMAC 6.500% 6/15/2018 44 GMAC 6.500% 11/15/2018 42 GMAC 6.500% 12/15/2018 47 GMAC 6.500% 12/15/2018 43 GMAC 6.500% 5/15/2019 44 GMAC 6.500% 1/15/2020 42 GMAC 6.500% 2/15/2020 44 GMAC 6.550% 12/15/2019 44 GMAC 6.550% 12/15/2019 42 GMAC 6.600% 8/15/2016 46 GMAC 6.600% 5/15/2018 44 GMAC 6.600% 6/15/2019 40 GMAC 6.600% 6/15/2019 43 GMAC 6.625% 10/15/2011 57 GMAC 6.650% 6/15/2018 41 GMAC 6.650% 10/15/2018 43 GMAC 6.650% 10/15/2018 43 GMAC 6.650% 2/15/2020 48 GMAC 6.700% 5/15/2014 45 GMAC 6.700% 5/15/2014 44 GMAC 6.700% 6/15/2014 48 GMAC 6.700% 8/15/2016 45 GMAC 6.700% 6/15/2018 45 GMAC 6.700% 6/15/2018 43 GMAC 6.700% 11/15/2018 44 GMAC 6.700% 6/15/2019 42 GMAC 6.700% 12/15/2019 44 GMAC 6.750% 9/15/2011 57 GMAC 6.750% 10/15/2011 54 GMAC 6.750% 10/15/2011 56 GMAC 6.750% 9/15/2012 49 GMAC 6.750% 9/15/2012 48 GMAC 6.750% 10/15/2012 48 GMAC 6.750% 4/15/2013 42 GMAC 6.750% 4/15/2013 44 GMAC 6.750% 6/15/2014 49 GMAC 6.750% 12/1/2014 63 GMAC 6.750% 7/15/2016 48 GMAC 6.750% 8/15/2016 45 GMAC 6.750% 9/15/2016 46 GMAC 6.750% 6/15/2017 47 GMAC 6.750% 3/15/2018 42 GMAC 6.750% 7/15/2018 40 GMAC 6.750% 9/15/2018 45 GMAC 6.750% 10/15/2018 45 GMAC 6.750% 11/15/2018 45 GMAC 6.750% 5/15/2019 45 GMAC 6.750% 5/15/2019 45 GMAC 6.750% 6/15/2019 42 GMAC 6.750% 6/15/2019 43 GMAC 6.750% 3/15/2020 44 GMAC 6.800% 2/15/2013 47 GMAC 6.800% 4/15/2013 45 GMAC 6.800% 9/15/2018 43 GMAC 6.800% 10/15/2018 47 GMAC 6.850% 5/15/2018 42 GMAC 6.875% 8/28/2012 64 GMAC 6.875% 10/15/2012 48 GMAC 6.875% 4/15/2013 47 GMAC 6.875% 8/15/2016 48 GMAC 6.875% 7/15/2018 43 GMAC 6.900% 6/15/2017 44 GMAC 6.900% 7/15/2018 44 GMAC 6.900% 8/15/2018 46 GMAC 6.950% 6/15/2017 40 GMAC 7.000% 10/15/2011 58 GMAC 7.000% 9/15/2012 51 GMAC 7.000% 10/15/2012 54 GMAC 7.000% 12/15/2012 45 GMAC 7.000% 1/15/2013 49 GMAC 7.000% 6/15/2017 44 GMAC 7.000% 7/15/2017 44 GMAC 7.000% 2/15/2018 43 GMAC 7.000% 2/15/2018 43 GMAC 7.000% 2/15/2018 44 GMAC 7.000% 3/15/2018 45 GMAC 7.000% 5/15/2018 44 GMAC 7.000% 8/15/2018 40 GMAC 7.000% 9/15/2018 44 GMAC 7.000% 2/15/2021 46 GMAC 7.000% 9/15/2021 45 GMAC 7.000% 9/15/2021 45 GMAC 7.000% 6/15/2022 44 GMAC 7.000% 11/15/2023 43 GMAC 7.000% 11/15/2024 45 GMAC 7.000% 11/15/2024 46 GMAC 7.000% 11/15/2024 40 GMAC 7.050% 3/15/2018 45 GMAC 7.050% 3/15/2018 40 GMAC 7.050% 4/15/2018 41 GMAC 7.100% 9/15/2012 51 GMAC 7.100% 1/15/2013 48 GMAC 7.100% 1/15/2013 50 GMAC 7.125% 8/15/2012 50 GMAC 7.125% 12/15/2012 44 GMAC 7.125% 10/15/2017 43 GMAC 7.150% 8/15/2010 73 GMAC 7.150% 11/15/2012 54 GMAC 7.150% 9/15/2018 46 GMAC 7.150% 3/15/2025 45 GMAC 7.150% 1/15/2025 45 GMAC 7.200% 10/15/2017 45 GMAC 7.200% 10/15/2017 46 GMAC 7.250% 8/15/2012 52 GMAC 7.250% 12/15/2012 47 GMAC 7.250% 12/15/2012 46 GMAC 7.250% 9/15/2017 47 GMAC 7.250% 9/15/2017 49 GMAC 7.250% 9/15/2017 43 GMAC 7.250% 9/15/2017 47 GMAC 7.250% 4/15/2018 45 GMAC 7.250% 1/15/2018 47 GMAC 7.250% 4/15/2018 43 GMAC 7.250% 8/15/2018 45 GMAC 7.250% 8/15/2018 42 GMAC 7.250% 9/15/2018 47 GMAC 7.250% 1/15/2025 46 GMAC 7.250% 2/15/2025 42 GMAC 7.250% 3/15/2025 45 GMAC 7.300% 12/15/2017 44 GMAC 7.300% 1/15/2018 45 GMAC 7.300% 1/15/2018 45 GMAC 7.350% 4/15/2018 44 GMAC 7.375% 11/15/2016 46 GMAC 7.375% 4/15/2018 42 GMAC 7.400% 12/15/2017 45 GMAC 7.500% 10/15/2012 48 GMAC 7.500% 11/15/2016 47 GMAC 7.500% 8/15/2017 47 GMAC 7.500% 11/15/2017 51 GMAC 7.500% 11/15/2017 49 GMAC 7.500% 12/15/2017 50 GMAC 7.500% 12/15/2017 55 GMAC 7.500% 3/15/2025 42 GMAC 7.625% 11/15/2012 48 GMAC 7.750% 10/15/2012 53 GMAC 7.750% 10/15/2017 46 GMAC 7.875% 11/15/2012 51 GMAC 8.000% 6/15/2010 70 GMAC 8.000% 10/15/2017 48 GMAC 8.000% 11/15/2017 46 GMAC 8.000% 3/15/2025 41 GMAC 8.125% 11/15/2017 50 GMAC 8.250% 9/15/2012 56 GMAC 8.400% 8/15/2015 48 GMAC 8.650% 8/15/2015 47 GMAC 9.000% 7/15/2015 52 GMAC 9.000% 7/15/2020 48 GMAC 9.000% 7/15/2020 56 GMAC LLC 6.000% 4/1/2011 63 GMAC LLC 6.000% 12/15/2011 63 GMAC LLC 6.500% 5/15/2012 64 GMAC LLC 6.500% 6/15/2012 64 GMAC LLC 6.500% 6/15/2012 64 GMAC LLC 6.600% 6/15/2012 64 GMAC LLC 6.600% 6/15/2012 64 GMAC LLC 6.625% 5/15/2012 65 GMAC LLC 6.700% 7/15/2012 64 GMAC LLC 6.750% 7/15/2012 50 GMAC LLC 7.000% 7/15/2012 65 GMAC LLC 7.100% 7/15/2012 65 GMAC LLC 7.150% 7/15/2012 59 GOLDEN BOOKS PUB 10.750% 12/31/2004 0 GS CAPITAL II 5.793% 12/15/2012 63 GULF STATES STL 13.500% 4/15/2003 100 HARRAHS OPER CO 5.375% 12/15/2013 55 HARRAHS OPER CO 5.625% 6/1/2015 48 HARRAHS OPER CO 5.750% 10/1/2017 47 HARRAHS OPER CO 6.500% 6/1/2016 47 HAWAIIAN TELCOM 9.750% 5/1/2013 35 HAWAIIAN TELCOM 12.500% 5/1/2015 23 HEADWATERS INC 2.500% 2/1/2014 68 HERBST GAMING 7.000% 11/15/2014 22 HERBST GAMING 8.125% 6/1/2012 24 HILTON HOTELS 7.500% 12/15/2017 69 HINES NURSERIES 10.250% 10/1/2011 57 HNG INTERNORTH 9.625% 3/15/2006 14 HUNTINGTON CAPIT 6.650% 5/15/2037 65 IDEARC INC 8.000% 11/15/2016 61 INDALEX HOLD 11.500% 2/1/2014 59 INTERDENT SVC 10.750% 12/15/2011 50 ION MEDIA 11.000% 7/31/2013 29 IRIDIUM LLC/CAP 10.875% 7/15/2005 1 IRIDIUM LLC/CAP 11.250% 7/15/2005 1 IRIDIUM LLC/CAP 13.000% 7/15/2005 1 IRIDIUM LLC/CAP 14.000% 7/15/2005 0 ISLE OF CAPRI 7.000% 3/1/2014 70 ISOLAGEN INC 3.500% 11/1/2024 10 JAZZ TECHNOLOGIE 8.000% 12/31/2011 69 JETBLUE AIRWAYS 3.750% 3/15/2035 63 JONES APPAREL 6.125% 11/15/2034 71 JPMORGAN CHASE 10.000% 7/31/2008 28 JPMORGAN CHASE 12.000% 7/31/2008 26 K HOVNANIAN ENTR 6.250% 1/15/2015 62 K HOVNANIAN ENTR 6.250% 1/15/2016 60 K HOVNANIAN ENTR 6.375% 12/15/2014 62 K HOVNANIAN ENTR 6.500% 1/15/2014 63 K HOVNANIAN ENTR 7.500% 5/15/2016 63 K HOVNANIAN ENTR 7.750% 5/15/2013 57 K HOVNANIAN ENTR 8.875% 4/1/2012 69 KAISER ALUMINUM 9.875% 2/15/2002 0 KAISER ALUMINUM 12.750% 2/1/2003 7 KELLSTROM INDS 5.500% 6/15/2003 0 KELLWOOD CO 7.625% 10/15/2017 62 KEMET CORP 2.250% 11/15/2026 64 KEYCORP CAP VII 5.700% 6/15/2035 75 KEYSTONE AUTO OP 9.750% 11/1/2013 52 KIMBALL HILL INC 10.500% 12/15/2012 1 KNIGHT RIDDER 4.625% 11/1/2014 70 KNIGHT RIDDER 5.750% 9/1/2017 62 KNIGHT RIDDER 6.875% 3/15/2029 63 KNIGHT RIDDER 7.150% 11/1/2027 66 KRATON POLYMERS 8.125% 1/15/2014 54 LANDRY'S RESTAUR 7.500% 12/15/2014 66 LAZYDAYS RV 11.750% 5/15/2012 71 LEHMAN BROS HLDG 4.800% 6/24/2023 59 LEHMAN BROS HLDG 5.000% 5/28/2023 60 LEHMAN BROS HLDG 5.000% 6/10/2023 61 LEHMAN BROS HLDG 5.000% 6/17/2023 65 LEHMAN BROS HLDG 5.100% 2/15/2020 62 LEHMAN BROS HLDG 5.250% 5/20/2023 69 LEHMAN BROS HLDG 5.350% 6/14/2030 68 LEHMAN BROS HLDG 5.375% 5/6/2023 66 LEHMAN BROS HLDG 5.400% 3/20/2020 68 LEHMAN BROS HLDG 5.400% 3/30/2029 50 LEHMAN BROS HLDG 5.400% 6/21/2030 64 LEHMAN BROS HLDG 5.450% 4/6/2029 53 LEHMAN BROS HLDG 5.450% 2/22/2030 62 LEHMAN BROS HLDG 5.450% 7/19/2030 51 LEHMAN BROS HLDG 5.500% 2/27/2020 65 LEHMAN BROS HLDG 5.500% 3/14/2023 62 LEHMAN BROS HLDG 5.500% 4/8/2023 64 LEHMAN BROS HLDG 5.500% 4/15/2023 63 LEHMAN BROS HLDG 5.500% 4/23/2023 79 LEHMAN BROS HLDG 5.500% 10/7/2023 68 LEHMAN BROS HLDG 5.500% 1/27/2029 67 LEHMAN BROS HLDG 5.500% 2/3/2029 54 LEHMAN BROS HLDG 5.500% 8/2/2030 63 LEHMAN BROS HLDG 5.550% 3/9/2029 57 LEHMAN BROS HLDG 5.550% 1/25/2030 52 LEHMAN BROS HLDG 5.550% 9/27/2030 57 LEHMAN BROS HLDG 5.550% 12/31/2034 63 LEHMAN BROS HLDG 5.600% 2/17/2029 52 LEHMAN BROS HLDG 5.600% 2/24/2029 61 LEHMAN BROS HLDG 5.600% 3/2/2029 68 LEHMAN BROS HLDG 5.600% 2/25/2030 51 LEHMAN BROS HLDG 5.600% 5/3/2030 51 LEHMAN BROS HLDG 5.625% 3/15/2030 59 LEHMAN BROS HLDG 5.650% 11/23/2029 59 LEHMAN BROS HLDG 5.650% 8/16/2030 60 LEHMAN BROS HLDG 5.700% 1/28/2018 71 LEHMAN BROS HLDG 5.700% 4/13/2029 57 LEHMAN BROS HLDG 5.700% 12/14/2029 60 LEHMAN BROS HLDG 5.750% 3/27/2023 69 LEHMAN BROS HLDG 5.750% 10/15/2023 66 LEHMAN BROS HLDG 5.750% 10/21/2023 59 LEHMAN BROS HLDG 5.750% 11/25/2023 64 LEHMAN BROS HLDG 5.750% 12/16/2028 70 LEHMAN BROS HLDG 5.750% 8/24/2029 57 LEHMAN BROS HLDG 5.750% 9/14/2029 64 LEHMAN BROS HLDG 5.750% 10/12/2029 66 LEHMAN BROS HLDG 5.750% 3/29/2030 69 LEHMAN BROS HLDG 5.800% 10/25/2030 57 LEHMAN BROS HLDG 5.900% 5/4/2029 66 LEHMAN BROS HLDG 5.900% 2/7/2031 59 LEHMAN BROS HLDG 5.950% 12/20/2030 70 LEHMAN BROS HLDG 6.000% 10/23/2028 62 LEHMAN BROS HLDG 6.000% 11/18/2028 58 LEHMAN BROS HLDG 6.000% 5/11/2029 62 LEHMAN BROS HLDG 6.000% 7/20/2029 59 LEHMAN BROS HLDG 6.000% 4/30/2034 59 LEHMAN BROS HLDG 6.000% 2/24/2036 59 LEHMAN BROS HLDG 6.100% 8/12/2023 65 LEHMAN BROS HLDG 6.500% 3/6/2023 69 LEHMAN BROS HLDG 8.420% 10/25/2017 59 LEINER HEALTH 11.000% 6/1/2012 10 LIBERTY MEDIA 3.250% 3/15/2031 60 LIBERTY MEDIA 3.500% 1/15/2031 44 LIBERTY MEDIA 3.750% 2/15/2030 51 LIBERTY MEDIA 4.000% 11/15/2029 55 LIFECARE HOLDING 9.250% 8/15/2013 61 MAGNA ENTERTAINM 7.250% 12/15/2009 50 MAGNA ENTERTAINM 8.550% 6/15/2010 52 MAJESTIC STAR 9.750% 1/15/2011 30 MANNKIND CORP 3.750% 12/15/2013 55 MASONITE CORP 11.000% 4/6/2015 41 MBIA INC 5.700% 12/1/2034 41 MBIA INC 6.400% 8/15/2022 40 MBIA INS CO 14.000% 1/15/2033 N.A. MEDIANEWS GROUP 6.375% 4/1/2014 42 MEDIANEWS GROUP 6.875% 10/1/2013 42 MERIX CORP 4.000% 5/15/2013 51 MERRILL LYNCH 8.100% 6/4/2009 N.A. MERRILL LYNCH 10.000% 3/6/2009 N.A. MERRILL LYNCH 11.000% 4/28/2009 N.A. MERRILL LYNCH 12.000% 3/26/2010 N.A. MERRILL LYNCH 12.100% 6/25/2009 N.A. METALDYNE CORP 10.000% 11/1/2013 50 METALDYNE CORP 11.000% 6/15/2012 22 MICRON TECH 1.875% 6/1/2014 69 MISSOURI PAC RR 5.000% 1/1/2045 70 MORGAN STANLEY 8.000% 7/20/2009 N.A. MORGAN STANLEY 10.000% 4/20/2009 N.A. MORGAN STANLEY 10.000% 5/20/2009 N.A. MORGAN STANLEY 12.000% 7/20/2009 N.A. MORRIS PUBLISH 7.000% 8/1/2013 53 MOVIE GALLERY 11.000% 5/1/2012 30 MRS FIELDS 9.000% 3/15/2011 62 MRS FIELDS 11.500% 3/15/2011 60 NATL CITY CORP 4.000% 2/1/2011 69 NATL CITY CORP 4.900% 1/15/2015 51 NATL CITY CORP 6.875% 5/15/2019 48 NATL FINANCIAL 0.750% 2/1/2012 68 NEFF CORP 10.000% 6/1/2015 37 NELNET INC 7.400% 9/29/2036 67 NETWORK EQUIPMNT 3.750% 12/15/2014 62 NEW ORL GRT N RR 5.000% 7/1/2032 57 NEW PLAN EXCEL 7.500% 7/30/2029 62 NEW PLAN REALTY 6.900% 2/15/2028 59 NEW PLAN REALTY 6.900% 2/15/2028 66 NEW PLAN REALTY 7.650% 11/2/2026 66 NEW PLAN REALTY 7.680% 11/2/2026 62 NEWARK GROUP INC 9.750% 3/15/2014 70 NORTEK INC 8.500% 9/1/2014 62 NORTH ATL TRADNG 9.250% 3/1/2012 51 NORTHERN PAC RY 3.000% 1/1/2047 52 NORTHERN PAC RY 3.000% 1/1/2047 48 NORTHWESTERN CRP 7.960% 12/21/2026 4 NORTHWST STL&WIR 9.500% 6/15/200 10 NTK HOLDINGS INC 0.000% 3/1/2014 43 NUTRITIONAL SRC 10.125% 8/1/2009 13 NUVEEN INVEST 5.500% 9/15/2015 59 OAKWOOD HOMES 7.875% 3/1/2004 3 OAKWOOD HOMES 8.125% 3/1/2009 0 OSCIENT PHARM 3.500% 4/15/2011 35 OSI RESTAURANT 10.000% 6/15/2015 63 OSI RESTAURANT 10.000% 6/15/2015 63 OUTBOARD MARINE 10.750% 6/1/2008 10 PAC-WEST TELECOM 13.500% 2/1/2009 2 PACKAGING DYNAMI 10.000% 5/1/2016 67 PALM HARBOR 3.250% 5/15/2024 61 PANAMSAT CORP 9.000% 8/15/2014 65 PANTRY INC 3.000% 11/15/2012 70 PEGASUS SATELLIT 9.750% 12/1/2006 0 PIEDMONT AVIAT 10.250% 1/15/2049 0 PIERRE FOODS INC 9.875% 7/15/2012 8 PINNACLE AIRLINE 3.250% 2/15/2025 65 PLY GEM INDS 9.000% 2/15/2012 55 PMI GROUP INC 6.000% 9/15/2016 66 POPE & TALBOT 8.375% 6/1/2013 2 POPE & TALBOT 8.375% 6/1/2013 0 PORTOLA PACKAGIN 8.250% 2/1/2012 42 PRIMUS TELECOM 3.750% 9/15/2010 44 PRIMUS TELECOM 5.000% 6/30/2009 68 PRIMUS TELECOM 8.000% 1/15/2014 29 PROPEX FABRICS 10.000% 12/1/2012 0 PSINET INC 10.000% 2/15/2005 0 PSINET INC 11.500% 11/1/2008 0 QUALITY DISTRIBU 9.000% 11/15/2010 51 RADIAN GROUP 5.375% 6/15/2015 43 RADIAN GROUP 5.625% 2/15/2013 44 RADIAN GROUP 7.750% 6/1/2011 61 RAFAELLA APPAREL 11.250% 6/15/2011 55 REALOGY CORP 10.500% 4/15/2014 65 REALOGY CORP 12.375% 4/15/2015 49 REGIONS FIN TR 6.625% 5/15/2047 47 RESIDENTIAL CAP 8.000% 2/22/2011 31 RESIDENTIAL CAP 8.375% 6/30/2010 34 RESIDENTIAL CAP 8.500% 6/1/2012 31 RESIDENTIAL CAP 8.500% 4/17/2013 29 RESIDENTIAL CAP 8.875% 6/30/2015 35 RESIDENTIAL CAP 9.625% 5/15/2015 N.A. RESTAURANT CO 10.000% 10/1/2013 58 RF MICRO DEVICES 1.000% 4/15/2014 68 RF MICRO DEVICES 1.000% 4/15/2014 67 RH DONNELLEY 6.875% 1/15/2013 55 RH DONNELLEY 6.875% 1/15/2013 54 RH DONNELLEY 6.875% 1/15/2013 54 RH DONNELLEY 8.875% 1/15/2016 54 RH DONNELLEY 8.875% 10/15/2017 55 RITE AID CORP 6.875% 8/15/2013 63 RITE AID CORP 6.875% 12/15/2028 48 RITE AID CORP 7.700% 2/15/2027 51 RITE AID CORP 8.625% 3/1/2015 66 RITE AID CORP 9.375% 12/15/2015 64 RITE AID CORP 9.500% 6/15/2017 64 RJ TOWER CORP 12.000% 6/1/2013 2 ROTECH HEALTHCA 9.500% 4/1/2012 65 SANDISK CORP 1.000% 5/15/2013 68 SEARS ROEBUCK AC 6.750% 1/15/2028 72 SEARS ROEBUCK AC 7.000% 6/1/2032 67 SERVICEMASTER CO 7.100% 3/1/2018 64 SERVICEMASTER CO 7.250% 3/1/2038 59 SERVICEMASTER CO 7.450% 8/15/2027 44 SIX FLAGS INC 4.500% 5/15/2015 56 SIX FLAGS INC 9.625% 6/1/2014 48 SIX FLAGS INC 9.750% 4/15/2013 53 SLM CORP 4.500% 12/15/2012 70 SLM CORP 4.800% 12/15/2028 65 SLM CORP 5.000% 6/15/2019 68 SLM CORP 5.000% 6/15/2019 59 SLM CORP 5.000% 6/15/2028 67 SLM CORP 5.150% 12/15/2028 69 SLM CORP 5.190% 4/24/2019 68 SLM CORP 5.250% 6/15/2020 N.A. SLM CORP 5.250% 3/15/2028 69 SLM CORP 5.250% 6/15/2028 61 SLM CORP 5.250% 12/15/2028 56 SLM CORP 5.300% 9/15/2030 61 SLM CORP 5.350% 6/15/2025 63 SLM CORP 5.350% 6/15/2028 55 SLM CORP 5.400% 3/15/2023 60 SLM CORP 5.400% 3/15/2030 60 SLM CORP 5.400% 6/15/2030 60 SLM CORP 5.450% 3/15/2023 64 SLM CORP 5.450% 6/15/2028 67 SLM CORP 5.500% 6/15/2019 69 SLM CORP 5.500% 9/15/2019 64 SLM CORP 5.500% 6/15/2029 63 SLM CORP 5.500% 6/15/2029 57 SLM CORP 5.500% 3/15/2030 59 SLM CORP 5.500% 3/15/2030 64 SLM CORP 5.500% 6/15/2030 61 SLM CORP 5.500% 12/15/2030 60 SLM CORP 5.500% 12/15/2030 62 SLM CORP 5.550% 6/15/2025 65 SLM CORP 5.550% 3/15/2028 58 SLM CORP 5.550% 3/15/2029 70 SLM CORP 5.600% 3/15/2022 65 SLM CORP 5.600% 3/15/2024 67 SLM CORP 5.600% 12/15/2028 60 SLM CORP 5.600% 3/15/2029 55 SLM CORP 5.600% 6/15/2029 62 SLM CORP 5.600% 12/15/2029 61 SLM CORP 5.600% 12/15/2029 59 SLM CORP 5.625% 1/25/2025 65 SLM CORP 5.650% 6/15/2022 62 SLM CORP 5.650% 6/15/2022 69 SLM CORP 5.650% 3/15/2029 61 SLM CORP 5.650% 3/15/2029 56 SLM CORP 5.650% 12/15/2029 63 SLM CORP 5.650% 12/15/2029 64 SLM CORP 5.650% 12/15/2029 62 SLM CORP 5.650% 3/15/2030 60 SLM CORP 5.650% 9/15/2030 59 SLM CORP 5.650% 3/15/2032 62 SLM CORP 5.700% 3/15/2029 59 SLM CORP 5.700% 3/15/2029 57 SLM CORP 5.700% 3/15/2029 60 SLM CORP 5.700% 3/15/2029 65 SLM CORP 5.700% 3/15/2029 61 SLM CORP 5.700% 3/15/2029 61 SLM CORP 5.700% 3/15/2029 56 SLM CORP 5.700% 12/15/2029 63 SLM CORP 5.700% 3/15/2030 64 SLM CORP 5.700% 6/15/2030 63 SLM CORP 5.700% 3/15/2032 62 SLM CORP 5.750% 3/15/2029 63 SLM CORP 5.750% 3/15/2029 N.A. SLM CORP 5.750% 3/15/2029 60 SLM CORP 5.750% 3/15/2029 65 SLM CORP 5.750% 3/15/2029 70 SLM CORP 5.750% 6/15/2029 62 SLM CORP 5.750% 6/15/2029 60 SLM CORP 5.750% 9/15/2029 60 SLM CORP 5.750% 9/15/2029 63 SLM CORP 5.750% 12/15/2029 62 SLM CORP 5.750% 12/15/2029 66 SLM CORP 5.750% 12/15/2029 61 SLM CORP 5.750% 3/15/2030 59 SLM CORP 5.750% 3/15/2030 64 SLM CORP 5.750% 6/15/2032 56 SLM CORP 5.750% 6/15/2032 63 SLM CORP 5.800% 12/15/2028 65 SLM CORP 5.800% 3/15/2032 60 SLM CORP 5.800% 3/15/2032 66 SLM CORP 5.800% 3/15/2032 61 SLM CORP 5.850% 9/15/2029 66 SLM CORP 5.850% 12/15/2031 64 SLM CORP 5.850% 3/15/2032 57 SLM CORP 5.850% 3/15/2032 64 SLM CORP 5.850% 3/15/2032 63 SLM CORP 5.850% 6/15/2032 64 SLM CORP 5.850% 6/15/2032 64 SLM CORP 6.000% 6/15/2019 69 SLM CORP 6.000% 6/15/2019 66 SLM CORP 6.000% 6/15/2021 66 SLM CORP 6.000% 6/15/2021 65 SLM CORP 6.000% 6/15/2026 68 SLM CORP 6.000% 6/15/2026 59 SLM CORP 6.000% 12/15/2026 61 SLM CORP 6.000% 12/15/2026 66 SLM CORP 6.000% 12/15/2026 64 SLM CORP 6.000% 3/15/2027 66 SLM CORP 6.000% 12/15/2028 63 SLM CORP 6.000% 12/15/2028 65 SLM CORP 6.000% 3/15/2029 59 SLM CORP 6.000% 6/15/2029 65 SLM CORP 6.000% 6/15/2029 65 SLM CORP 6.000% 6/15/2029 62 SLM CORP 6.000% 9/15/2029 64 SLM CORP 6.000% 9/15/2029 67 SLM CORP 6.000% 9/15/2029 67 SLM CORP 6.000% 6/15/2031 64 SLM CORP 6.000% 6/15/2031 63 SLM CORP 6.000% 12/15/2031 61 SLM CORP 6.000% 12/15/2031 64 SLM CORP 6.000% 12/15/2031 67 SLM CORP 6.000% 12/15/2031 57 SLM CORP 6.000% 3/15/2037 60 SLM CORP 6.000% 3/15/2037 63 SLM CORP 6.000% 3/15/2037 61 SLM CORP 6.050% 12/15/2026 67 SLM CORP 6.050% 12/15/2031 60 SLM CORP 6.100% 12/15/2028 66 SLM CORP 6.100% 12/15/2031 61 SLM CORP 6.200% 12/15/2031 62 SLM CORP 6.250% 6/15/2029 66 SLM CORP 6.250% 6/15/2029 64 SLM CORP 6.250% 6/15/2029 64 SLM CORP 6.250% 9/15/2029 64 SLM CORP 6.250% 9/15/2029 68 SLM CORP 6.250% 9/15/2031 68 SLM CORP 6.300% 9/15/2031 67 SLM CORP 6.350% 9/15/2031 66 SLM CORP 6.350% 9/15/2031 62 SLM CORP 6.400% 9/15/2031 64 SLM CORP 6.450% 9/15/2031 69 SLM CORP 6.500% 9/15/2031 65 SPANSION LLC 11.250% 1/15/2016 63 SPECTRUM BRANDS 7.375% 2/1/2015 59 SPINNAKER INDS 10.750% 10/15/2006 0 STANLEY-MARTIN 9.750% 8/15/2015 45 STATION CASINOS 6.500% 2/1/2014 50 STATION CASINOS 6.625% 3/15/2018 48 STATION CASINOS 6.875% 3/1/2016 51 STRATEGIC HOTEL 3.500% 4/1/2012 69 SUNTRUST CAPITAL 6.100% 12/15/2036 66 SWIFT TRANS CO 12.500% 5/15/2017 34 SYNOVUS FINL 5.125% 6/15/2017 84 TELIGENT INC 11.500% 12/1/2007 0 TELIGENT INC 11.500% 3/1/2008 0 THORNBURG MTG 8.000% 5/15/2013 67 TIMES MIRROR CO 6.610% 9/15/2027 32 TIMES MIRROR CO 7.250% 3/1/2013 40 TIMES MIRROR CO 7.250% 11/15/2096 32 TIMES MIRROR CO 7.500% 7/1/2023 35 TOUSA INC 7.500% 3/15/2011 5 TOUSA INC 7.500% 1/15/2015 6 TOUSA INC 9.000% 7/1/2010 60 TOUSA INC 9.000% 7/1/2010 56 TOUSA INC 10.375% 7/1/2012 5 TRANS MFG OPER 11.250% 5/1/2009 5 TRANS-LUX CORP 8.250% 3/1/2012 50 TREX CO INC 6.000% 7/1/2012 67 TRIAD ACQUIS 11.125% 5/1/2013 60 TRIBUNE CO 4.875% 8/15/2010 63 TRIBUNE CO 5.250% 8/15/2015 38 TRONOX WORLDWIDE 9.500% 12/1/2012 65 TRUE TEMPER 8.375% 9/15/2011 62 TRUMP ENTERTNMNT 8.500% 6/1/2015 50 UAL 1995 TRUST 9.020% 4/19/2012 40 UAL CORP 4.500% 6/30/2021 40 UAL CORP 4.500% 6/30/2021 36 UAL CORP 5.000% 2/1/2021 40 US AIR INC 10.300% 7/15/2049 0 US AIR INC 10.700% 1/15/2049 0 US AIR INC 10.750% 1/15/2049 N.A. US AIR INC 10.900% 1/1/2049 0 US AIRWAYS GROUP 7.000% 9/30/2020 N.A. USAUTOS TRUST 5.100% 3/3/2011 63 USB CAPITAL IX 6.189% 09/20/2020 70 VENTURE HLDGS 9.500% 7/1/2005 0 VENTURE HLDGS 11.000% 6/1/2007 0 VERASUN ENERGY 9.375% 6/1/2017 56 VERENIUM CORP 5.500% 4/1/2027 41 VERTIS INC 10.875% 6/15/2009 18 VICORP RESTAURNT 10.500% 4/15/2011 18 VION PHARM INC 7.750% 2/15/2012 53 VISTEON CORP 7.000% 3/10/2014 50 WASH MUT BANK NV 5.125% 1/15/2015 63 WASH MUTUAL INC 4.625% 4/1/2014 49 WASH MUTUAL INC 5.250% 9/15/2017 62 WASH MUTUAL INC 7.250% 11/1/2017 65 WCI COMMUNITIES 4.000% 8/5/2023 64 WCI COMMUNITIES 6.625% 3/15/2015 33 WCI COMMUNITIES 7.875% 10/1/2013 34 WCI COMMUNITIES 9.125% 5/1/2012 33 WEBSTER CAPITAL 7.650% 6/15/2037 67 WEIRTON STEEL 10.750% 6/1/2005 100 WILLIAM LYON 7.500% 2/15/2014 43 WILLIAM LYON 7.625% 12/15/2012 43 WILLIAM LYON 10.750% 4/1/2013 43 WIMAR OP LLC/FIN 9.625% 12/15/2014 36 WINSTAR COMM INC 14.750% 4/15/2010 0 WITCO CORP 6.875% 2/1/2026 64 YANKEE ACQUISITI 9.750% 2/15/2017 66 YOUNG BROADCSTNG 8.750% 1/15/2014 44 YOUNG BROADCSTNG 10.000% 3/1/2011 51 ********* 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 ***