/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080730.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 30, 2008, Vol. 12, No. 180 Headlines ACA ABS: Fitch Cuts Six Notes Ratings and Removes Negative Watch ACA ABS: Fitch Trims Six Notes Ratings on Collateral Deterioration ADVANCED CELL: Warns of Immediate Need for Additional Funding AK STEEL: Moody's Reviews Ratings for Possible Upgrade ALLIS-CHALMERS: Moody's Assigns B2 Rating to Proposed Notes ALLIS-CHALMER: S&P Rates Proposed $350MM Sr. Unsecured Notes 'B+' AMERICAN COLOR: Court to Consider Chapter 11 Plan on August 26 AMERICAN COLOR: Obtains CCCA Initial Stay Order Against Creditors AMERICAN COLOR: CCCA Court Appoints PwC as Information Officer AMERICAN COLOR: Wants Filing of Schedules Extended to September 29 AMERICHIP INT'L: Posts $618,218 Net Loss in 2nd Qtr. Ended May 31 ARCHIMEDES FUNDING: Moody's Puts on Review Ba2 Notes Rating ARTHROCARE CORP: Audit Group Urges Restatement of Financial Data ASTRATA GROUP: May 31 Balance Sheet Upside-Down by $5.0 Million ATA AIRLINES: Can Sell Remaining Aircraft-Related and Misc. Assets BHM TECHNOLOGIES: Liquidation Analysis for Hypothetical Ch. 7 BHM TECHNOLOGIES: Financial Projections for Plan Alternatives BHM TECHNOLOGIES: Eclipse Wants to Lift Stay to Recover Tooling BLUE WATER: Mulls Business Closure After $39MM Sale Fell Through BOMBAY COMPANY: Court Sets Aug. 20 to Decide on Plan Confirmation CALLIDUS DEBT: S&P Places 'BB-' Notes Rating Under Negative Watch CANARGO ENERGY: Stockholders Re-Elect Five Directors to Board CELLEGY PHARMA: Posts $389,000 Net Loss in 2008 Second Quarter CFM US: Wants Exclusive Plan Filing Period Extended to October 7 CHAD THERAPEUTICS: Has until August 25 to File Delisting Cure Plan CIPRICO INC: Seeks Relief Under Chapter 11 in Minnesota CLEAR CHANNEL: Fitch Cuts Issuer Default Rating to B from BB- CLEARPOINT BUSINESS: Appeals Nasdaq Decision to Delist Securities COMFORCE CORP: Launches $5MM Final Redemption of 12% Senior Notes CREDIT AND REPACKAGED SECURITIES: Moody's Cuts Notes Rating to Ba3 CREDIT AND REPACKAGED SECURITIES: Moody's Cuts Rating to Ba1 DELFASCO INC: Case Summary & 20 Largest Unsecured Creditors DI ROMA FURNITURE: Case Summary & 20 Largest Unsecured Creditors DOUGLAS FURNITURE: Case Summary & 20 Largest Unsecured Creditors DYNAMERICA MFG: Gets Interim Approval to Use $2MM of DIP Loan ECOVENTURE WIGGINS: Regions Bank Wants Chapter 11 Case Dismissed ENVIROTECH INDUSTRIES: Hearing on Environmental Case Set Aug. 11 FREMONT GENERAL: Completes Sale of FIL's Assets to CapitalSource GIBSON GUITAR: Moody's Affirms B2 Corporate Family Rating GINO FERRI: Case Summary & 18 Largest Unsecured Creditors GSC ABS: Fitch Chips Ratings on Five Notes; Removes Neg. Watch GSC ABS: Fitch Cuts Notes Ratings on Four Classes; Removes Watch HEARTLAND INC: To Purchase Lee Companies for $3,250,000 in Cash IGNITION POINT: Dir. Robert Neal Retires as Board Director INDYMAC BANCORP: Oct. 14 Set as Bar Date for IndyMac Bank Claims INDYMAC BANCORP: Insured Deposits Recoverable at IndyMac Federal INFE-HUMAN RESOURCES: May 31 Balance Sheet Upside-Down by $418,582 INFORMATION TECHNOLOGY: Case Summary & 20 Largest Unsec. Creditors INNOVATIVE COMM: Case Trustee, et al. Snub Ex-CEO's Purchase Bid JED OIL: AMEX to Delist Stocks; Additional Cure Plan Due August 5 JEFFERSON COUNTY: Majority of Commissioners Oppose Bankruptcy JHT HOLDINGS: May Access GECC's $25MM DIP Fund on Final Basis JHT HOLDINGS: Court Approves Use of $35 Million Exit Financing JHT HOLDINGS: Amends Chapter 11 Plan and Disclosure Statement JHT HOLDINGS: May Hire Administar as Claims and Notice Agent JHT HOLDINGS: Pepper Hamilton Approved as Delaware Counsel JUPITER HIGH-GRADE: Fitch Junks Ratings on Five Classes of Notes KENNETH HUETE: Voluntary Chapter 11 Case Summary LATAM TRUST: Moody's Downgrades Certificates Rating to B1 LB-UBS COMMERCIAL: S&P Junks Ratings on Three Certificate Classes LB-UBS COMMERCIAL: S&P Holds Ratings on Good Operating Performance LEVITT AND SONS: Court Okays Expanded Duties of Depositors Panel LEVITT AND SONS: Sunshine Kitchens Seeks to Foreclose Liens LORDSHIP DEVELOPMENT: Case Summary and Two Largest Creditors LORDSHIP DEVELOPMENT: Section 341(a) Meeting Slated for August 19 MCCLATCHY COMPANY: Earns $19.7 Million in 2008 Second Quarter MEADWESTVACO CORP: Moody's Affirms Corporate Family Rating at Ba1 MERITAGE HOMES: Lenders Reduce Borrowing Capacity by $300 Million MERVYNS LLC: Files for Chapter 11 Bankr. Protection in Delaware METROMEDIA COMPANY: Affiliates File Chapter 7 Liquidation MOSAIC CO: Moody's Ups Senior Unsecured Ratings to Baa3 from Ba1 MPI CENTER: Case Summary and Two Largest Unsecured Creditors MRS. FIELDS: Board Names J. Lauck and M. Ward as Interim Co-CEOs NEW CENTURY ENERGY: Files for Chapter 11 Bankruptcy in Texas NORMAN MONROE: Case Summary & 15 Largest Unsecured Creditors NORTHERN BAY: Sec. 341(a) Meeting Set for July 31 ONE COMMUNICATIONS: S&P Cuts Rating to B- from B on Credit Cushion ORIGIN AGRITECH: Inks Notes Repurchase Deal with Citadel Equity PALM TERRACES: Involuntary Chapter 11 Case Summary PEREGRINE PHARMA: Receives Nasdaq Bid Price Non-Compliance Notice PRIMEDIA INC: Sells Website, Auto Guide Publications PRINTERS ROW: Section 341(a) Meeting Set for August 26 PROGRESSIVE MOLDED: Creditors' Committee Taps Arent Fox as Counsel PROGRESSIVE MOLDED: US Debtors Consents to Liquidation Proposal PROGRESSIVE MOLDED: Wants Filing of Schedules Extended to Sept. 5 PROXYMED INC: Bid Price Rule Offense Cues Nasdaq to Delist Stocks PROXYMED INC: Has Until Today to Appeal Nasdaq's Delisting Verdict RANSOM-HEART: Voluntary Chapter 11 Case Summary REALTY COMPANY: Involuntary Chapter 11 Case Summary SASCO: Moody's Cuts Ratings of 55 Tranches on Scratch, Dent Deals SECURITY CAPITAL: Strikes $1.8-Bil. Bailout Deal from XL Capital SECURITY CAPITAL: Inks Forbearance and Waiver Pact with Lenders SIRIUS SATELLITE: Expects 25% Revenue Increase in 2008 2nd Quarter SOLOMON TECHNOLOGIES: Issues 6,821,360 Shares of Common Stock SOLAR COSMETIC: Sells IP for $8.5MM; Resolves Feud with Committee SOLUTIA INC: Court to Hear Settlement of Avoidance Actions Today SPHERIX INC: Share Rule Violation Cues Nasdaq to Delist Securities ST BERNARD: Completes Debt Refinancing, May Access $1.5MM Credit SUNCREST LLC: Committee Wants Chapter 11 Case Converted SUPERIOR INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors SYNTAX-BRILLIAN: U.S. Trustee & Panel Balks at Sale Bid Procedures TIMOTHY RAGEN: Case Summary & Two Largest Unsecured Creditors TRADEWINDS AIRLINES: Files for Bankruptcy in Florida TRADEWINDS AIRLINES: Voluntary Chapter 11 Case Summary TRANSNATIONAL AUTO: May 31 Balance Sheet Upside-Down by $3.1MM TRICOM SA: Court Allows Use of Credit Suisse' Collateral TRICOM SA: Court Adjourns Plan Status Conference Hearing to Aug. 7 UBS AG: May Be Forced to Buy Back $25BB Illiquid Securities UNICO INCORPORATED: Chairman Ray C. Brown Buys 39,768 More Shares USA SPRINGS: Taps Two Law Firms as Counsel; U.S. Trustee Objects USA SPRINGS: U.S. Trustee Names 3-Member Creditors Panel USA SPRINGS: Creditors Panel May Retain Harman Law as Counsel USA SPRINGS: Files Schedules of Assets and Liabilities VERSO TECHNOLOGIES: Mulls Sale of Switching Business to Pay Debts VERTIS HOLDINGS: Court to Consider Chapter 11 Plan on August 26 VERTIS HOLDINGS: Wants Filing of Schedules Extended to Sept. 25 XM SATELLITE: Launches Offering of $400 Million New Senior Notes XM SATELLITE: S&P Keeps Dev. Watch After Approval of Sirius Merger * Moody's Reports: U.S. Credit Card Performance Mixed in May * S&P Says Distress Ratio on US Investment-Grade Hits 252 Bps * S&P Says Oil and Gas Industry Continues to Thrive on High Prices * Chadbourne & Parke Names London and NY Lawyers as Partners * Upcoming Meetings, Conferences and Seminars ********* ACA ABS: Fitch Cuts Six Notes Ratings and Removes Negative Watch ---------------------------------------------------------------- Fitch downgraded and removed from Rating Watch Negative six classes of notes issued by ACA ABS 2003-1, Limited. These rating actions are effective immediately: -- $59,264,512 Class A-R Notes downgraded to 'CCC' from 'BB' and removed from Rating Watch Negative; -- $155,569,344 Class A-T Notes downgraded to 'CCC' from 'BB' and removed from Rating Watch Negative; -- $30,000,000 Class A-M Notes downgraded to 'CC' from 'B+' and removed from Rating Watch Negative; -- $15,000,000 Class B Notes downgraded to 'CC' from 'B' and removed from Rating Watch Negative; -- $29,000,000 Class C Notes downgraded to 'C' from 'CCC' and removed from Rating Watch Negative; -- $17,995,395 Class D Notes downgraded to 'C' from 'CC' and removed from Rating Watch Negative. ACA ABS 2003-1 is a cash flow structured finance collateralized debt obligation that closed on May 20, 2003 and was managed by ACA Management, LLC until April 2008, when management duties were transferred to Solidus Capital, LLC. Presently 45.9% of the portfolio is comprised of 2005, 2006 and 2007 vintage U.S. subprime residential mortgage-backed securities, and 2.1% is comprised of 2005 and 2006 vintage U.S. Alternative-A RMBS. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime RMBS. Since November 21, 2007, approximately 57.6% of the portfolio has been downgraded with 4.7% of the portfolio currently on Rating Watch Negative. 56.7% of the portfolio is now rated below investment grade, including 48.3% of the portfolio rated 'CCC+' and below. Fitch notes that, overall, 52.9% of the assets in the portfolio now carry a rating below the rating it assumed in November 2007. The negative credit migration experienced since the last review on November 21, 2007 has resulted in the Weighted Average Rating Factor deteriorating to 56 from 22, breaching its covenant of 16, as of the latest trustee report dated June 3, 2008. The collateral deterioration has caused each of the overcollateralization tests to fall below 100% and fail their respective triggers. As of the latest trustee report the class A/B OC ratio was 86.4%, the class C OC ratio was 78.3%, and the class D OC ratio was 73.8%. As a result of the coverage test failures, the transaction is currently diverting interest proceeds from the class C and class D notes, instead using these proceeds to redeem class A-T and class A-R principal, pro rata. Interest distributions owed to the class C and class D notes are currently being deferred. The ratings on the class A-R, class A-T, class A-M, and class 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 class D notes address the ultimate receipt of interest payments and ultimate receipt of principal as per the transaction's governing documents. ACA ABS: Fitch Trims Six Notes Ratings on Collateral Deterioration ------------------------------------------------------------------ Fitch downgraded six classes of notes issued by ACA ABS 2003-2, Limited. Additionally, all nine classes of notes issued by ACA ABS 2003-2 are removed from Rating Watch Negative. These rating actions are effective immediately: -- $86,713,502 Class A-1SD Notes downgraded to 'B' from 'BB+', removed from Rating Watch Negative; -- $186,448,826 Class A-1SU Notes downgraded to 'B' from 'BB+', removed from Rating Watch Negative; -- $5,919,010 Class A-1SW Notes downgraded to 'B' from 'BB+', removed from Rating Watch Negative; -- $108,000,000 Class A-1J Notes downgraded to 'CCC' from 'B+', removed from Rating Watch Negative; -- $51,000,000 Class A-2 Notes downgraded to 'CC' from 'CCC', removed from Rating Watch Negative; -- $36,000,000 Class A-3 Notes downgraded to 'C' from 'CC', removed from Rating Watch Negative. -- $7,000,000 Class B-F Notes remain at 'C', removed from Rating Watch Negative; -- $14,901,123 Class B-V Notes remain at 'C', removed from Rating Watch Negative; -- $2,980,225 Class C Notes remain at 'C', removed from Rating Watch Negative. ACA ABS 2003-2 is a cash flow structured finance collateralized debt obligation that closed on November 6, 2003 and was managed by ACA Management, LLC until April 2008, when management duties were transferred to Solidus Capital, LLC. Presently 29.6% of the portfolio is comprised of 2005, 2006 and 2007 vintage U.S. subprime residential mortgage-backed securities, and 1.3% is comprised of 2005 vintage U.S. Alternative-A RMBS. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime RMBS. Since November 21, 2007, approximately 46.5% of the portfolio has been downgraded with 9.3% of the portfolio currently on Rating Watch Negative. 48.8% of the portfolio is now rated below investment grade, including 37.7% of the portfolio rated 'CCC+' and below. Fitch notes that, overall, 40.7% of the assets in the portfolio now carry a rating below the rating it assumed in November 2007. The negative credit migration experienced since the last review on Nov. 21, 2007 has resulted in the Weighted Average Rating Factor deteriorating to 30 from 6, breaching its covenant of 5, as of the latest trustee report dated June 2, 2008. The collateral deterioration has caused each of the overcollateralization tests to fall below 100% and fail their respective triggers. As of the latest trustee report the senior OC ratio was 74%, the class A-3 OC ratio was 68.6%, the class B OC ratio was 65.7%, and the class C OC ratio was 65.4%. As a result of the coverage test failures, the transaction is currently diverting interest proceeds from the class A-3, class B-F, class B-V, and class C notes, instead using these proceeds to redeem class A-1SD, class A-1SU, and class A-1SW principal, pro rata. Interest distributions owed to the class A-3, class B-F, class B- V, and class C notes are currently being deferred. The ratings on the class A-1SD, class A-1SU, class A-1SW, class A- 1J, and class A-2 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 A-3, class B-F, class B-V, and class C notes address the ultimate receipt of interest payments and ultimate receipt of principal as per the transaction's governing documents. In addition, the class A-1SW notes are insured by a financial guaranty insurance policy issued by CIFG Guaranty, whose insurer financial strength rating was downgraded by Fitch to 'CCC' in May 2008. The credit enhancement provided by CIFG to the class A-1SW notes was not factored into this review. ADVANCED CELL: Warns of Immediate Need for Additional Funding ------------------------------------------------------------- Advanced Cell Technology Inc. warned in its latest form 10-Q filing with the U.S. Securities and Exchange Commission that its cash and cash equivalents are limited. In the short term, it will require substantial additional funding prior to July 31, 2008 in order to maintain its current level of operations. If it is unable to raise additional funding, it will be forced to either substantially scale back its business operations or curtail business operations entirely. Advanced Cell's consolidated balance sheet at March 31, 2008, showed $6,960,337 in total assets and $34,974,421 in total liabilities, resulting in a $28,014,084 stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,003,916 in total current assets available to pay $16,952,412 in total current liabilities. The company reported a net loss of $9,519,659 for the first quarter ended March 31, 2008, compared with a net loss of $24,741,001 in the same period of 2007. Revenues for the three months ended March 31, 2008, and 2007, were $124,343 in each period. These amounts relate primarily to license fees and royalties collected that are being amortized over the period of the license granted, and are therefore typically consistent between periods. Other expense, net, for the three months ended March 31, 2008, and 2007, were approximately $3,865,000 and $19,471,000, respectively. The decrease in net other expense in the three months ended March 31, 2008, compared to that of the earlier period, relates primarily to adjustments to fair value of derivatives related to the convertible debenture financings and the charges related to issuance of convertible debentures. 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?2fa4 Going Concern Doubt As reported in the Troubled Company Reporter on June 12, 2008, Los Angeles-based Singer Lewak Greenbaum & Goldstein LLP expressed substantial doubt about Advanced Cell Technology 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 auditor pointed to the company's recurring losses from operations, negative cash flows from operations, substantial stockholders' deficit and current liabilities that exceed current assets. About Advanced Cell Based in Worcester, Mass., Advanced Cell Technology Inc. (OTC BB: ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human embryonic and adult stem cell technology in the emerging fields of regenerative medicine. Principal activities to date have included obtaining financing, securing operating facilities, and conducting research and development. The company has no therapeutic products currently available for sale and does not expect to have any therapeutic products commercially available for sale for a period of years, if at all. AK STEEL: Moody's Reviews Ratings for Possible Upgrade ------------------------------------------------------ Moody's Investors Service placed the ratings (Ba3 corporate family rating) of AK Steel Corporation under review for possible upgrade. The review is attributable to the company's improved operating and financial profile driven by strong steel fundamentals and the company's meaningful reduction in debt, pension, and OPEB liabilities. The review will focus on the sustainable level of earnings and cash flow generation in a more normalized steel price environment as well as the company's cost position in light of raw material and energy cost increase challenges. In addition, Moody's will analyze AK Steel's product mix and end market exposures, particularly to the automotive and appliance sectors, which are experiencing softness due to economic weakness in the US, but also the electrical steel market where the company enjoys a solid position and where there is more limited downside risk due to strength in the power generation markets. Further factors to be considered in the review include liquidity and working capital management together with the company's financial policies as they relate to its capital structure and shareholder returns. On Review for Possible Upgrade: ..Issuer: AK Steel Corporation ....Corporate Family Rating, Placed on Review for Possible Upgrade, currently Ba3 ....Probability of Default Rating, Placed on Review for Possible Upgrade, currently Ba3 ....Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1, LGD4, 65 Outlook Actions: ..Issuer: AK Steel Corporation ....Outlook, Changed To Rating Under Review From Stable Moody's last rating action on AK Steel was August 13, 2007, at which time AK Steel's corporate family rating was upgraded to Ba3 from B1, its $550 million senior unsecured notes due 2012 were upgraded to B1 from B2, and its SGL-1 speculative grade liquidity rating was affirmed. Headquartered in Middletown, Ohio, AK Steel ranks as a middle tier, high quality integrated steel producer in the United States (total shipments were around 6.5 million tons over the trailing twelve months ended June 30, 2008 while revenues were $7.4 billion). The company produces flat-rolled carbon, stainless and electrical steel products. ALLIS-CHALMERS: Moody's Assigns B2 Rating to Proposed Notes ----------------------------------------------------------- Moody's Investors Service assigned a B2 (LGD 4, 55%) rating to the proposed US$350 million senior unsecured notes to be issued by Allis-Chalmers Energy Inc. (ALY). At the same time, Moody's changed ALY's rating outlook to positive from stable and affirmed its B2 Corporate Family Rating, B2 Probability of Default Rating, B2 (LGD 4, 55%) senior unsecured note ratings, and SGL-2 speculative grade liquidity rating. Proceeds from the notes will be used to fund the cash portion of ALY's pending acquisition of Bronco Drilling Company, Inc. (not rated), refinance $72 million in debt at Bronco, fund approximately $13 million in severance costs to Bronco executives and $15 million in transaction costs and fees, with the remainder used to repay borrowings under ALY's revolving credit facility and for general corporate purposes. The Bronco acquisition is being financed with $200 million in cash and 16.8 million shares of ALY's common stock. The sale of the notes is conditioned on the closing of the Bronco acquisition, which pending regulatory and shareholder approvals, is expected to close in August. The positive outlook reflects the company's increased scale and diversification, which are indicative of a higher rating, and management's track record of financing material acquisitions with a substantial equity component. Management's demonstrated willingness to issue equity has provided a degree of financial cushion partially mitigating the risks associated with ALY's aggressive growth strategy. These risks include valuation and performance risk inherent to a proportionally high level of acquisitions priced during fairly robust sector conditions, event and integration risk, and business and political risk associated with step-outs into new business lines and regions with substantial political risk. An upgrade of ALY's B2 Corporate Family Rating will depend on the company's success in integrating and achieving projected earnings from the Bronco acquisition, which represents the company's largest acquisition to date and its first entry into the contract drilling market in the U.S.; generating improved results from its recently restructured rental tools business, which has performed below expectations; maintaining conservative financial leverage, with debt/EBITDA maintained within 3x; and continuing to finance material acquisitions with a meaningful equity component. Weaker than expected operating results, protracted acquisition integration, or an unfavorable change in financial policies could result in the outlook returning to stable. Allis-Chalmers Energy Inc. is headquartered in Houston, Texas. ALLIS-CHALMER: S&P Rates Proposed $350MM Sr. Unsecured Notes 'B+' ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B+' rating to the company's proposed $350 million senior unsecured notes due 2018. At the same time S&P assigned the notes a recovery rating of '3', indicating meaningful (50% to 70%) recovery in the event of a payment default. The company will use note proceeds to help to finance the acquisition of Bronco Drilling Co. Inc. (unrated). S&P also affirmed the 'B+' corporate credit rating. The outlook is stable. The corporate credit rating on Allis reflects recently soft operating performance at the company, specifically its rental services segment, and low rig utilization rates at Bronco during the fourth quarter of 2007 and the first quarter of 2008, which resulted in lower cash flows. Also, the company is very acquisitive. While the acquisitions have improved Allis' scale and scope of operations, they also raise questions as to whether management has the ability to effectively manage such rapid growth. Furthermore, the acquisition of Bronco represents the company's first venture in the domestic land rig business. Finally, the oilfield services industry is highly cyclical. S&P expect demand for services to improve during the second half of 2008 because of robust commodity prices, but the rig count has historically been very volatile, and a reversion to low drilling activities would result in significantly lower cash flows for Allis. "The rating also reflects expected improvements in operating performance as a result of strong industry conditions during the second half of 2008, adherence to its stated financial policy, and meaningful improvements in the company's scale and product offerings during the past year," said Standard & Poor's credit analyst Amy Eddy. Allis is a small, rapidly growing oilfield services company operating primarily in Texas, Louisiana, and Argentina. The company has consummated several acquisitions since 2001 and has increased its pro forma EBITDA to about $300 million compared with $37 million when Standard & Poor's first rated the company in January 2006. Although the pace of acquisitions raises questions as to whether management has the ability to effectively manage such rapid growth and complicates operating performance comparisons, S&P recognizes that the acquisitions have strengthened the company's business risk profile. The outlook is stable. Standard & Poor's recognizes that industry trends for oilfield services should remain favorable in the near term, which should improve Allis' cash flows during the second half of 2008. S&P expects the company to continue to be acquisitive and maintain a debt to EBITDA ratio of around 3x. Any further positive rating actions are contingent on Allis' ability to profitably maintain its scale and scope of operations. Worse- than-expected financial results, whether due to deteriorating industry fundamentals or company-specific issues, that result in debt to EBITDA above 4x and interest coverage of less than 3x could result in a negative rating action. AMERICAN COLOR: Court to Consider Chapter 11 Plan on August 26 -------------------------------------------------------------- ACG Holdings, Inc., informs parties-in-interest in a notice filed in its bankruptcy proceedings that Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on August 26, 2008, at 10:00 a.m., to consider confirmation of the Joint Prepackaged Plan of Reorganization of ACG Holdings, Inc., Vertis Holdings, Inc., and their respective debtor-affiliates. At the hearing, the Court will consider whether the Plan complies with the disclosure and confirmation requirements under the Bankruptcy Code. The Joint Plan and its accompanying disclosure statement was filed by ACG and Vertis on July 15, 2008. The Plan contemplates a merger of the Vertis Debtors and the ACG Debtors, and a comprehensive financial restructuring of the ACG Debtors' existing equity and debt structures. Any objections to the Joint Plan must be filed with the Court no later than August 19, 2008. It must be in writing, state the name of the objection party, and state with particularity the basis and nature of any objection to the Plan. About Vertis Holdings Inc. Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. -- http://www.vertisinc.com/-- is a provider of targeted print advertising and direct marketing solutions to America's retail and consumer services companies. The company and its six affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11460). Gary T. Holtzer, Esq. and Stephen A. Youngman, Esq. at Weil, Gotshal & Manges LLP represent as the Debtors lead counsels and Mark D. Collins, Esq. and Michael Joseph Merchant, Esq. at Richards Layton & Finger, P.A. represent as their Delaware local counsels. When the Debtors filed for protection from their creditors they listed estimated assets between $500 million and $1 billion and estimated debts of more than 1 billion. About American Color Graphics American Color Graphics Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. The company filed and its four affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11467). Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors they listed estimated assets $100 million to $500 million and estimated debts of $500 million to $1 billion. AMERICAN COLOR: Obtains CCCA Initial Stay Order Against Creditors ----------------------------------------------------------------- ACG Holdings, Inc., and American Color Graphics, Inc., sought and obtained on July 16, 2008, an initial order from the Superior Court of Justice (Commercial List) for the Province of Ontario, granting them protection from their creditors under the Companies' Creditors Arrangement Act, R.S.C. 1985, c . C-36, as amended. Pursuant to the Initial CCAA Stay Order, the Canadian Court held that for so long as the ACG Entities' Chapter 11 proceedings are ongoing, no proceeding or enforcement process in any court or tribunal will be commenced or continued against or in respect of the ACG Entities or the CCAA Applicants, PricewaterhouseCoopers Inc. or the Canadian Court-appointed Information Officer, or affecting the Applicants' business or property, except with the written consent of the Applicants or leave of the Court. All proceedings currently under way against or in respect of the Applicants are stayed and suspended pending further Court order. The Canadian Court restrains parties, during the Stay Period, from accelerating, terminating, suspending, modifying, canceling, terminating, withdrawing or interfering with any licenses, permits, approvals or consents relating to the Applicants or in connection with their Property. Additionally, no action may be asserted, commenced, proceeded with or continued against any member of the Applicants' board of directors, officers or employees with respect to any claim that arose prior to the Stay order. The Court Order does not prohibit any renewal registration or filing under any Personal Property Act in Canada, as required to continue or otherwise maintain an existing filing or recording of any lease, security interest, mortgage or "hypothec", which would otherwise expire during the Stay Period. The Canadian Court does not require claimants to make advances of money or credit to the Applicants. No Claimant is prohibited from exercising any right to terminate, amend or claim any accelerated payment under an "eligible financial contract." The Canadian Court entitles, but does not oblige, the Applicants to pay all expenses they incur or will incur in the ordinary course of business prior to and after the entry of the Stay Order. Pursuant to the Initial Stay Order, the Applicants are required, within 10 days, to notify known creditors located in Canada having claims in excess of C$1,000, of the CCAA filing and the Monitor's contact information. ACG intends to continue operating on a "business as usual basis," and known creditors will continue to be paid in the normal course or on other terms as may be agreed between the parties. About American Color Graphics American Color Graphics Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. The company filed and its four affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11467). Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors they listed estimated assets $100 million to $500 million and estimated debts of $500 million to $1 billion. AMERICAN COLOR: CCCA Court Appoints PwC as Information Officer -------------------------------------------------------------- The Superior Court of Justice (Commercial List) for the Province of Ontario, in Canada, appointed PricewaterhouseCoopers Inc., as the information officer of American Color Graphics Inc. and its affiliates during the pendency of their restructuring proceedings under the Companies' Creditors Arrangement Act. As Information Officer, PwC will deliver to the Court, as advisable and upon any material developments uniquely affecting the Canadian assets or creditors, a status report of the Applicants' Chapter 11 proceedings. The Canadian Court authorized the Information Officer to engage legal counsel, agents and advisors in Canada, that it considers necessary to advise and assist in the exercise of its powers and the discharge of its obligations. The Applicants and the Information Officer will incur no liability or obligation as a result of the appointment of the Information Officer, or the non-negligent fulfillment of its duties in carrying out the provisions of the Court Order. No action or other proceedings will be commenced against the Applicants or Information Officer as a result of, or relating in any way to, the appointment or the fulfillment of their duties with respect to the action or proceeding. The Canadian Court authorized the Applicants and the Information Officer to, from time to time, apply to the Court for further relief, including directions in the discharge of their powers. About Vertis Holdings Inc. Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. -- http://www.vertisinc.com/-- is a provider of targeted print advertising and direct marketing solutions to America's retail and consumer services companies. The company and its six affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11460). Gary T. Holtzer, Esq. and Stephen A. Youngman, Esq. at Weil, Gotshal & Manges LLP represent as the Debtors lead counsels and Mark D. Collins, Esq. and Michael Joseph Merchant, Esq. at Richards Layton & Finger, P.A. represent as their Delaware local counsels. When the Debtors filed for protection from their creditors they listed estimated assets between $500 million and $1 billion and estimated debts of more than 1 billion. About American Color Graphics American Color Graphics Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. The company filed and its four affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11467). Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors they listed estimated assets $100 million to $500 million and estimated debts of $500 million to $1 billion. AMERICAN COLOR: Wants Filing of Schedules Extended to September 29 ------------------------------------------------------------------ Pursuant to Section 521 of the U.S. Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure, Vertis Holdings, Inc. and ACG Holdings, Inc., and their debtors affiliates are required to file, within 15 days upon filing for bankruptcy: -- schedules of assets and liabilities, -- schedules of executory contracts and unexpired leases, -- lists of equity holders, -- schedules of current income and expenditures, and -- statements of financial affairs. However, Rule 1007-1(b) of the Local Rules of Practice and Procedure for the United States Bankruptcy Court for the District of Delaware provides that if the total number of creditors in a debtor's Chapter 11 case exceeds 200, the debtor must file the Schedules and Statements within 30 days of the Petition Date. Vertis and ACG are currently required to file their Schedules and Statements by August 14, 2008. Vertis, however, notes that the preparation of the Schedules and Statements that relate to more than its 50,000 creditors will require significant expenditure of time and effort. Similarly, ACG asserts that given the large number of its creditors, the complexity of its businesses and its limited staffing, the 30-day extension period under Local Rule 1007-1(b) is not sufficient. In separate requests, Vertis asks the Court to extend the time within which it may file its Schedules and Statements through and including September 25, 2008. ACG asks the Court to extend its schedules and statements filing deadline, through and including September 29, 2008. In the event ACG seeks to establish a claims bar date, ACG seeks to have its Schedules and Statements filing deadline extended to a date that is 10 days after the filing of a Bar Date motion. Moreover, Vertis and ACG ask Judge Christopher S. Sontchi to permanently waive the requirement for them to file the Schedules and Statements upon the effective date of their Prepackaged Plan of Reorganization. About Vertis Holdings Inc. Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. -- http://www.vertisinc.com/-- is a provider of targeted print advertising and direct marketing solutions to America's retail and consumer services companies. The company and its six affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11460). Gary T. Holtzer, Esq. and Stephen A. Youngman, Esq. at Weil, Gotshal & Manges LLP represent as the Debtors lead counsels and Mark D. Collins, Esq. and Michael Joseph Merchant, Esq. at Richards Layton & Finger, P.A. represent as their Delaware local counsels. When the Debtors filed for protection from their creditors they listed estimated assets between $500 million and $1 billion and estimated debts of more than 1 billion. About American Color Graphics American Color Graphics Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. The company filed and its four affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11467). Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors they listed estimated assets $100 million to $500 million and estimated debts of $500 million to $1 billion. AMERICHIP INT'L: Posts $618,218 Net Loss in 2nd Qtr. Ended May 31 ----------------------------------------------------------------- AmeriChip International Inc. reported a net loss of $618,218 on revenues of $440,097 for the second quarter ended May 31, 2008, compared with a net loss of $1,740,560 on revenues of $628,198 in the same period ended May 31, 2007. The decrease in net loss primarily reflects a decrease in operating expenses. At May 31, 2008, the company's consolidated balance sheet showed $6,940,503 in total assets, $6,806,793 in total liabilities, $3,413 in minority interest, and $130,297 in total stockholders' equity. The company's consolidated balance sheet at May 31, 2008, also showed strained liquidity with $947,652 in total current assets available to pay $4,193,146 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended May 31, 2008, are available for free at http://researcharchives.com/t/s?301c About AmeriChip International Headquartered in Clinton Township, Mich., AmeriChip International Inc. (OTC BB: ACHI.OB) -- http://www.americhiplacc.com/-- holds a patented technology known as Laser Assisted Chip Control, which can be used to re-engineer the manufacturing process for industrial metal machining applications. According to AmeriChip International, this technology, when implemented by the customer, will eliminate dangerous ribbon-like steel chips that tangle around moving tool parts, automation devices and other components essential to the machine processing of low to medium grade carbon steels and non-ferrous metal parts. Going Concern Doubt As reported in the Troubled Company Reporter on March 13, 2008, Jewett, Schwartz, Wolfe & Associates, in Hollywood, Fla., expressed substantial doubt about Americhip International Inc.'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 recurring losses from operations. At May 31, 2008, the company had an accumulated deficit of $33,747,767. ARCHIMEDES FUNDING: Moody's Puts on Review Ba2 Notes Rating ----------------------------------------------------------- Moody's Investors Service upgraded the rating on these notes issued by Archimedes Funding IV Ltd.: Class Description: US $42,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2013 Prior Rating: Aa2, on review for possible upgrade Current Rating: Aa1 According to Moody's, the rating action is the result of pay down on the Class A-1 Notes and related improvement in the Class A Overcollateralization Ratio. Additionally, Moody's placed on review for possible downgrade the rating on the following notes: Class Description: US $8,500,000 Class C Floating Rate Senior Secured Notes Due 2013 Prior Rating: Ba2 Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating action is the result of deterioration in the credit quality of the underlying collateral, consisting primarily of Senior Secured Loans. ARTHROCARE CORP: Audit Group Urges Restatement of Financial Data ---------------------------------------------------------------- ArthroCare Corp. will restate its financial statements for the years ended Dec. 31, 2006, and 2007, the quarters ended Sept. 30, 2006, Dec. 31, 2006, each of the quarters of 2007 and the quarter ended March 31, 2008, as a result of the determination by the audit committee of the board of directors on July 20, 2008, that the financial statements for these periods can no longer be relied upon. The restatement follows a recommendation by management that revenue in these issued financial statements must be adjusted because: -- the relationship between the company and DiscoCare Inc. during the periods being restated was a sales agent relationship, rather than that of a traditional distributor; and -- the sales price of products sold to State of the Art Medical Products Inc., Boracchia & Associates and Clinical Technology Inc. cannot be considered fixed or determinable upon shipment by ArthroCare during the periods being restated. The company will therefore account for sales by ArthroCare of products to each of these entities from the third quarter of 2006 to March 31, 2008, under a sell-through revenue recognition method that is appropriate for both of these situations, as opposed to a sell-in method. Under the sell-through method, revenue is not recognized until after the surgery is performed or a subsequent sale to another customer occurs. Sales to these companies for periods prior to the third quarter of 2006 will continue to be accounted for under the previous method of revenue recognition, either sell-in or sell-through depending on the terms of the previous contract with each company. On July 20, 2008, the audit committee discussed the matters with the management and the company's independent registered public accounting firm, PricewaterhouseCoopers LLP. The restatement involves the timing of revenue recognition from one period to another and is expected to result in a non-cash reduction in revenue for the periods being restated. The restatement is not expected to affect future cash flows. In addition to the changes from the sell-in method to the sell- through revenue recognition method for the four entities, the restatement will correct errors identified by management regarding: -- the classification to record as an offset to revenue for commissions paid by ArthroCare to SOTA, Clinical Technology and Arthroscopy & Medical Equipment International Inc. on products purchased directly by the distributor as principal and subsequently resold to third parties previously recorded as sales and marketing expense; -- the classification to record as an offset to revenue of distribution and marketing fees paid to SOTA, Boracchia, Frontier Medical Inc. and Clinical Technology recorded as sales and marketing expense that did not meet the criteria of EITF 01-9 Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vender's Products); -- the allocation of the purchase price for the DiscoCare acquisition on Dec. 31, 2007, under FAS 141, Business Combinations as a result of the conclusion that DiscoCare was an agent prior to the acquisition, not a distributor; and -- a foreign currency translation error in the fourth quarter of 2006 which was identified during management's conversion to the SAP enterprise financial reporting system. The sales prices to SOTA, Boracchia, and Clinical Technology were not fixed or determinable under Staff Accounting Bulletin 104, Revenue Recognition, which sets forth four criteria which are necessary before revenue can be recognized, including that sales prices are required to be fixed or determinable, due to rebates to the distributors if the distributors sold the products at prices below their purchase price from ArthroCare. Not meeting the criteria can result in a deferral of revenue recognition which is what management expects to occur in the restatement. While the restatement is being completed, the audit committee will oversee a review of the scope and nature of the company's internal controls. That review will be conducted by Latham & Watkins LLP with the assistance of FTI Consulting Inc. Depending on the results of this review, it may be expanded beyond internal controls. This review is being conducted separately from management's reassessment of the effectiveness of internal control over financial reporting. No conclusions on the effectiveness of internal control over financial reporting or disclosure controls and procedures are expected prior to the conclusion of the restatement and the filing of amended filings with the Securities and Exchange Commission. Management estimates that the effect of the restatement will be a non-cash reduction in revenue in 2006 of $4 million to $7 million and in 2007 of $20 million to $25 million. The estimated effect of the restatement on revenue in the first quarter of 2008 will be a reduction of $2 million to $5 million. Management estimates that the restatement will result in material reductions in operating income and net income for the annual and quarterly periods being restated. Management's reassessment of its prior accounting for sales to distributors resulted from discussions initiated by PwC. Management believes that completing the restatement process will enable the company to continue with its evaluation of financial and strategic alternatives. About ArthroCare Corp. Headquartered in Austin, Texas, ArthroCare Corp. (NASDAQ:ARTC) -- http://www.arthrocare.com/--is a medical device company that develops, manufactures and markets minimally invasive surgical products. Founded in 1993, ArthroCare markets surgical products across three business units: ArthroCare Sports Medicine, ArthroCare Spine, and ArthroCare Ear, Nose and Throat. It has also developed, manufactured and marketed Coblation-based and complementary products for application in neurology, cosmetic surgery, urology and gynecology, with research continuing in additional areas. ASTRATA GROUP: May 31 Balance Sheet Upside-Down by $5.0 Million --------------------------------------------------------------- Astrata Group Incorporated's consolidated balance sheet at May 31, 2008, showed $12.5 million in total assets and $17.5 million in total liabilities, resulting in a $5.0 million stockholders' deficit. At May 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $11.0 million in total current assets available to pay $17.4 million in total current liabilities. The company reported a net loss of $1.1 million on net sales of $3.0 million for the first quarter ended May 31, 2008, compared with a net loss of $4.1 million on net sales of $1.7 million in the same period ended May 31, 2007. The increase in net sales was attributable to increased business in South East Asia and approximately $800,000 related to the fixed-price contract with a Singapore entity the company entered into on April 10, 2007. Operating loss for the three months ended May 31, 2008, was $904,165, as compared with an operating loss of $3.4 million for the three months ended May 31, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended May 31, 2008, are available for free at http://researcharchives.com/t/s?301d About Astrata Group Headquartered in Costa Mesa, Calif., Astrata Group Inc. (OTC BB: ATTG.OB) -- http://www.astratagroup.com/-- is engaged in the telematics and Global Positioning System industry, focused on advanced location-based IT products and services that combine positioning, wireless communications, and information technologies. The company provides advanced positioning products, as well as monitoring and airtime services to industrial, commercial, governmental entities, academic/research institutions, and professional customers in a number of markets including surveying, utility, construction, homeland security, military, intelligence, mining, agriculture, marine, public safety, and transportation. * * * As reported in the Troubled Company Reporter on June 19, 2008 Windes & McClaughry Accountancy Corporation in Irvine, Calif., raised substantial doubt about Astrata Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Feb. 29, 2008. The auditing firm pointed to the company's negative working capital, accumulated deficit, and stockholders' deficit as of Feb. 29, 2008, and the company's net loss and negative operating cash flow for the year then ended. For the three months ended May 31, 2008, the company had a net loss of approximately $1.1 million. The company had negative cash flow from operating activities of approximately $1.1 million. In addition, the company had a working capital deficit of approximately $6.4 million, an accumulated deficit of approximately $48.2 million and a stockholders' deficit of approximately $5.0 million as of May 31, 2008. ATA AIRLINES: Can Sell Remaining Aircraft-Related and Misc. Assets ------------------------------------------------------------------ ATA Airlines, Inc., obtained the approval of the U.S. Bankruptcy Court for the Southern District of Indiana to auction off its remaining aircraft-related equipment and miscellaneous assets stored in its facilities in Dallas, Indianapolis and Hawaii. Assets slated for auctions do not include those that have been previously approved by the Court for sale or disposition, and are subject of pending sales. Also not included are assets that have been identified in the requests for proposal issued by ATA Airlines on June 10, 2008, except those the airlines decides not to include in a private or stalking horse bid sale. These consist of aircraft parts and equipment to be sold to the bidders not individually but in packages. ATA Airlines will conduct an auction of its assets in Dallas starting at 10:00 a.m., Central time, on September 4 and 5, 2008, at 2413 North Support Road-DFW Airport, in Dallas, Texas. Meanwhile, its assets in Indianapolis are slated for auction beginning at 10:00 a.m., Eastern time, on Sept. 10 and 11, 2008, at 4555 West Bradbury, in Indianapolis, Indiana. ATA Airlines will hold an auction in Hawaii simultaneous with the auction its auctioneer, Starman Bros. Auctions Inc., will conduct for Aloha Airlines, Inc. Concerned parties will receive a notice from the airlines about the date and venue for the auction, which has not yet been set to date. Starman Bros., has been required to file a report of the sale within seven days after the auctions, and furnish counsel for the U.S. Trustee, the Official Committee of Unsecured Creditors and JPMorgan Chase Bank, N.A., a copy of the report. The firm has also been required to file with each report an affidavit listing the commission received and costs reimbursed. No further hearing is required to approve the results of the auctions, or authorize the payment of commission and reimbursement of expenses to Starman Bros., unless an objection to the reports and affidavits is filed within five days after their issuance. 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 $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. Otterbourg, Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to the Committee. FTI Consulting, Inc., acts as the panel's financial advisors. The Court gave ATA Airlines Inc. until Feb. 26, 2009, to file its Chapter 11 plan and April 27, 2009, to solicit acceptances of that plan. (ATA Airlines Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). BHM TECHNOLOGIES: Liquidation Analysis for Hypothetical Ch. 7 ------------------------------------------------------------- BHM Technologies Holdings, Inc. and its debtor-subsidiaries have performed a liquidation analysis to determine the dollar amount that would be generated from a hypothetical liquidation of their assets in Chapter 7 as of the effective date of their Joint Plan of Reorganization. Pursuant to Section 1129(a)(7) of the Bankruptcy Code, each holder of an impaired claim or equity interest must either (a) accept a debtor's Chapter 11 plan or (b) receive or retain under the Plan property of a value, as of the Plan's effective date, that is not less than the value the non-accepting holder would receive or retain if the debtor was to be liquidated under Chapter 7 of the Bankruptcy Code on the Effective Date. BHM TECHNOLOGIES, INC. Liquidation Analysis As of September 30, 2008 STATEMENT OF ASSETS ($ in 000s) Projected Net Book | Hypothetical | Value | Percentage | (Unaudited) | Recovery | Hypothetical Recovery (Amount) ____________|_____________ | _______________________________ | Low High | Low High | Midpoint | --- ---- | --- ---- | -------- Cash & Cash | Equivalents 18,508.7 100.0% 100.0% 18,508.7 18,508.7 | 18,508.7 A/R 71,959.6 58.0% 85.0% 41,736.6 61,165.7 | 51,451.1 Inventories 20,417.7 80.1% 96.6% 16,347.9 19,732.5 | 18,040.2 Other Current | Assets 1,322.4 0.0% 20.0% 264.5 | 132.2 PP&E 85,886.8 40.0% 70.0% 34,354.7 60,120.8 | 47,237.8 Value from | Non-Debtor | Subsidiaries 29,872.2 9.0% 32.5% 2,683.6 9.720.1 | 6,201.9 -------- - ------- ------- | ------- Total Assets 435,331.0 113,631.5 169.512.3 | 141,571.9 | Costs Associated w/ Liquidation: | Payroll/Overhead (40,385.1) (35,117.4)| (37,751.3) Liquidation of PP&E (1,717.7) (3,006.0)| (2,361.9) Ch. 7 Trustee Fees (3,408.9) (5,085.4)| (4.247.2) Chapter 7 Professional Fees: (3,800.0) (3,800.0)| (3,800.0) ------- ------- | ------- Net Estimated Liquidation Proceeds | Available for Distribution $64,319.8 $122.503.4| $93,411.6 ======= ======= | ======= DISTRIBUTION ANALYSIS SUMMARY ($ in 000s) | | Midpoint | | Estimated | Estimated | | Allowable | Recovery | | Claims | Value | __________________________________________|___________ | ____________| Net Estimated Proceeds Available for Distribution $93,411.6 Less Superpriority Administrative Claims Debtor-in-Possession Facility 16,000.0 Add'l Drawn Letters of Credit 300.0 ------ ---- Total Superpriority Admin. Claims 16,300.0 Hypothetical recovery to Superpriority Administrative claims 100.0% _______________________________________________________________ _____ Less Carve Out for Professional Fees 1,000.0 1,000.0 --------- ---------- Proceeds Avail. for 1st Lien Debt Claims $76,112.0 Less Prepetition First Lien Debt Claims 264,394.0 264,394.0 ------ ---- Hypothetical recovery to Secured Claims 28.8% Proceeds Available after 1st Lien Debt Claims $ - _______________________________________________________________ _____ Less Prepetition 2nd Lien Debt Claims 72,112.5 72,112.5 --------- ---------- Proceeds Avail. for 1st Lien Debt Claims $76,112.0 Hypothetical recovery to Secured Claims 0.0% Proceeds Available after 2nd Lien Debt Claims $ - _______________________________________________________________ _____ Less Admin. & Priority Claims Ch. 11 Postpetition A/P and Accruals 32,956.9 Unpaid Ch. 11 Professional Fees 5,083.5 Estimated 503(b)(9) Claims 12,793.6 --------- ---------- Total Admin. & Priority Claims $50,834.1 Hypothetical recovery to Admin. & Priority Claims 0.0% Proceeds Available after Admin & Priority Claims $ - _______________________________________________________________ _____ Less Total Unsecured Claims: Estimated Trade Claims 45,654.5 Estimated Netherton Note 217.6 Estimated Other Unsecured 522.6 --------- ---------- Total UImin. & Priority Claims $46,394.7 Hypothetical recovery to Unsecured Claims 0.0% Net Estimated Deficiency to Unsecured Claims $ - _______________________________________________________________ _____ Headquartered in Ionia, Michigan, BHM Technologies Holdings Inc.-- http://www.browncorp.com/-- manufactures and sells automobile parts including air bags and electrical systems. It has manufacturing facilites in Mexico and operates under Brown Corp. BHM Technologies Holdings, Inc. and 14 affiliates filed separate voluntary petitions under Chapter 11 on May 19, 2008 (Bankr. W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum, Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, it listed estimated assets of $100 million to US$500 million and estimated debts of $100 million to US$500 million. The Debtors have until Sept. 16, 2008, to exclusively file their bankruptcy plan. (BHM Technologies Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BHM TECHNOLOGIES: Financial Projections for Plan Alternatives ------------------------------------------------------------- The Management of BHM Technologies Holdings, Inc. and its debtor- subsidiaries prepared financial projections for each of two alternatives under their the Joint Plan of Reorganization, for purposes of demonstrating the feasibility of the Plan. BHM TECHNOLOGIES, INC., ET AL. New Money Alternative Projected Statement of Operations (Unaudited) (dollars in thousands) Actual Projected YTD | 7 Mos. | 12 months Ending December 31 May'08 | Ending | ____________________________ | Dec. 8 | 2009 2010 2011 ------- | -------- | ------- -------- -------- Net Sales $164,630 $226,993 $399,869 $392,993 $410,923 cost of Sales 154,079 210,934 357,562 352,746 370,928 ------- -------- ------- -------- -------- Gross Profit 10,551 16,059 42,307 40,246 39,995 SG&A Expenses 9,299 12,214 20,839 20,904 21,200 Restructuring Expenses 8,567 15,798 560 2,678 - ------- -------- ------- -------- -------- Operating Expenses 17,865 128,012 21,399 23,582 21,200 Operating Income (7,314) (11,953) 20,908 16,664 18,796 Interest Expense 14,533 2,078 11,265 11,026 10,784 Amortization 3,779 6,615 8,458 7,665 7,665 Other Expenses 656 2,579 230 200 138 ------- -------- ------- -------- -------- Income Before Income Taxes (25,282) (23,208) 1,772 (1,355) 823 Provision from Income Taxes (9,241) - 620 (474) 288 ------- -------- ------- -------- -------- Net Income ($17,041) ($23,208) $1,152 ($881) $535 ======= ======== ======= ======== ======== BHM TECHNOLOGIES, INC., ET AL. New Money Alternative Projected Statements of Cash Flow (Unaudited) (dollars in thousands) Actual Projected YTD | 7 Mos. | 12 months Ending December 31 May'08 | Ending | ____________________________ | Dec. 8 | 2009 2010 2011 ------- | -------- | ------- -------- -------- Cash Flows from operating activities: Net Income ($17,041) ($23,208) $1,152 ($881) $535 Cancellation of Debt/Goodwill Impairment (117,698) 131,628 - - - Depreciation, Amortization & Depletion 8,579 17,991 23,860 22,534 26,011 Decrease in Accounts Receivable 3,550 9,940 (490) 712 (1,332) Decrease in Inventories (620) 1,409 (1,101) 124 (1,334) Decrease in Tooling 9,619 (1,150) _ - - Decrease in other assets 125,563 823 - - - Increase in accrued interest 8,613 (9,800) (635) - - Increase in payables (2,958) (18,610) (13,950) 1,022 1,911 Change in net working capital 143,767 (17,389) (16,175) 1,859 (754) ------- -------- ------- -------- -------- Cash flows from operations 17,607 109,021 8,836 23,512 25,792 Capex (8,393) (9,486) (17,836) (15,250) (16,850) Capital Contrib. - 12,500 - - - Changes in debt 2,707 (121,149) 406 (2,256) (925) ------- -------- ------- -------- -------- Change in Cash 11,920 (9,114) (8,594) 6,006 8,017 Beginning cash 9,788 21,708 12,594 4,000 10,006 ------- -------- ------- -------- -------- Net Change in Cash 11,920 (9,114) (8,594) 6,006 8,017 ------- -------- ------- -------- -------- Ending cash $21,708 $12,594 $4,000 $10,006 $18,023 ======= ======== ======= ======== ======== BHM TECHNOLOGIES, INC., ET AL. No New Money Alternative Projected Statement of Operations (Unaudited) (dollars in thousands) Actual Projected YTD | 7 Mos. | 12 months Ending December 31 May'08 | Ending | ____________________________ | Dec. 8 | 2009 2010 2011 ------- | -------- | ------- -------- -------- Net Sales $164,630 $226,993 $399,869 $392,993 $410,923 cost of Sales 154,079 210,934 357,562 352,746 370,928 ------- -------- ------- -------- -------- Gross Profit 10,551 16,059 42,307 40,246 39,995 SG&A Expenses 9,299 12,214 20,839 20,904 21,200 Restructuring Expenses 8,567 15,798 560 2,678 - ------- -------- ------- -------- -------- Operating Expenses 17,865 128,012 21,399 23,582 21,200 ------- -------- ------- -------- -------- Operating Income (7,314) (11,953) 20,908 16,664 18,796 Interest Expense 14,533 2,078 11,265 11,026 10,784 Amortization 3,779 6,615 8,458 7,665 7,665 Other Expenses 656 2,574 230 200 138 ------- -------- ------- -------- -------- Income Before Income Taxes (26,282) (23,219) 955 (1,355) 208 Provision from Income Taxes (9,241) - 334 (779) 73 ------- -------- ------- -------- -------- Net Income ($17,041) ($23,219) $621 ($1,447) $135 ======= ======== ======= ======== ======== BHM TECHNOLOGIES, INC., ET AL. No New Money Alternative Projected Statements of Cash Flow (Unaudited) (dollars in thousands) Actual Projected YTD | 7 Mos. | 12 months Ending December 31 May'08 | Ending | ____________________________ | Dec. 8 | 2009 2010 2011 ------- | -------- | ------- -------- -------- Cash Flows from operating activities: Net Income ($17,041) ($23,219) $621 ($1,447) $135 Cancellation of Debt/Goodwill Impairment (117,698) 131,628 - - - Depreciation, Amortization & Depletion 8,579 17,991 23,860 22,534 26,011 Decrease in Accounts Receivable 3,550 9,940 (490) 712 (1,332) Decrease in Inventories (620) 1,408 (1,101) 124 (1,334) Decrease in Tooling 9,619 (1,150) _ - - Decrease in other assets 125,563 823 - - - Increase in accrued interest 8,613 (9,800) (635) - - Increase in payables (2,958) (18,610) (13,950) 1,022 1,911 Change in net working capital 143,767 (17,389) (16,175) 1,859 (754) ------- -------- ------- -------- -------- Cash flows from operations 17,607 109,010 8,305 22,946 25,393 Capex (8,393) (9,486) (17,836) (15,250) (16,850) Capital Contrib. - _ - - - ------- -------- ------- -------- -------- Changes in debt 11,920 (17,708) 0 0 16 ------- -------- ------- -------- -------- Change in Cash 11,920 (17,708) (0) 0 16 Beginning cash 9,788 21,708 4,000 4,000 4,000 ------- -------- ------- -------- -------- Net Change in Cash 11,920 (17,708) 0 0 16 ------- -------- ------- -------- -------- Ending cash $21,708 $4,000 $4,000 $4,000 $4,016 ======= ======== ======= ======== Headquartered in Ionia, Michigan, BHM Technologies Holdings Inc.-- http://www.browncorp.com/-- manufactures and sells automobile parts including air bags and electrical systems. It has manufacturing facilites in Mexico and operates under Brown Corp. BHM Technologies Holdings, Inc. and 14 affiliates filed separate voluntary petitions under Chapter 11 on May 19, 2008 (Bankr. W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum, Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, it listed estimated assets of $100 million to US$500 million and estimated debts of $100 million to US$500 million. The Debtors have until Sept. 16, 2008, to exclusively file their bankruptcy plan. (BHM Technologies Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BHM TECHNOLOGIES: Eclipse Wants to Lift Stay to Recover Tooling --------------------------------------------------------------- Eclipse Tool & Die, Inc., asks the United States Bankruptcy Court for the Western District of Michigan (i) to grant it relief from the automatic stay to allow it to recover its tooling from BHM Technologies Holdings, Inc. and its debtor-subsidiaries, or in the alternative, and (ii) to direct them to pay $699,635, and provide adequate protection for its interest in the equipment. Eclipse, a Michigan corporation, is a small tool and die company located in Wayland, Michigan, that specializes in the building of special metal fabricating tools and dies that are ultimately delivered to companies such as the Debtors, to produce production parts for inclusion into major North American and Asian automotive original equipment manufacturers and Tier-1 suppliers. David S. Lefere, Esq., at Bolhouse, Vander Hulst, Risko & Baar, P.C., in Grandville Michigan, states that as of the Petition Date, Eclipse has not been paid the amount of $699,635, that it is owed for the Special Tooling it designed, fabricated and manufactured for Brown Corp. The Special Tooling designed, fabricated and manufactured by Eclipse for Brown Corp., was singularly designed for use in the automotive industry for the purpose of producing specific production and component parts for Chrysler, LLC's 2009 Dodge Journey vehicle program. Eclipse obtained and perfected tooling liens in the Special Tooling it designed, fabricated and manufactured for Brown Corp. in accordance with the procedures set forth in the Michigan Special Tool Lien Act, "MSTLA", MCL 570.541 et. seq. Mr. Lafere notes that Eclipse was required to borrow a significant amount of money in order to finance the design, fabrication and manufacture of the Special Tooling for Brown Corp. and is currently paying 7% of the $699,6350 on a yearly basis. Based on the interest rate at 7% on $699,635, Eclipse is paying $48,974 per year in order to finance the Special Tooling that has been designed, fabricated, manufactured and delivered to Brown Corp. and which Brown Corp. is generating revenue from. Eclipse says it is essentially paying approximately $136.00 in interest per day for the Special Tooling that is generating revenue for Brown Corp. and the Debtors. Each day that Eclipse goes unpaid by the Debtors, Eclipse suffers a loss of $136 a day, due to its interest payments, Mr. Lafere tells the Court. Headquartered in Ionia, Michigan, BHM Technologies Holdings Inc.-- http://www.browncorp.com/-- manufactures and sells automobile parts including air bags and electrical systems. It has manufacturing facilites in Mexico and operates under Brown Corp. BHM Technologies Holdings, Inc. and 14 affiliates filed separate voluntary petitions under Chapter 11 on May 19, 2008 (Bankr. W.D. Mich. Lead Case No. 08-04413). Hannah Mufson McCollum, Esq., Kay Standridge Kress, Esq., Robert S. Hertzberg, Esq., and Leon R. Barson, Esq. of Pepper Hamilton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, it listed estimated assets of $100 million to US$500 million and estimated debts of $100 million to US$500 million. The Debtors have until Sept. 16, 2008, to exclusively file their bankruptcy plan. (BHM Technologies Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BLUE WATER: Mulls Business Closure After $39MM Sale Fell Through ---------------------------------------------------------------- Blue Water Automotive Systems Inc., said it may cease operations as the approval of the going-concern sale of its business to Flex- N-Gate, LLC, did not push through. Blue Water has withdrawn its request for approval of that sale on July 16. The Debtors entered into a stalking-horse sale agreement with NYX, Inc., which proposed to pay $7,000,000 in cash, and $21,000,000 in promissory notes, subject to higher and better offers. During the auction, the Debtors selected Flex-N-Gate's bid, initially at $22,400,000, all in cash. Flex-N-Gate's "final" offer was valued at about $39,500,000, including $19,400,000 in cash, James D. Sampson, chief executive officer of Blue Water, said. The Debtors' decision to scrap the going-concern sale of their auto-parts business has raised questions as to the future of their business and employees. The delay in the sale has affected the company's supply contracts with the Detroit's Big Three -- Ford Motor Company, Chrysler, LLC, and General Motors Corp. -- and the confirmation hearings related to the Debtors' Chapter 11 plan of liquidation. Mr. Sampson said Blue Water reached an agreement to continue supplying parts for Ford until August 11. He, however, acknowledged that that General Motors and Chrysler probably will take their business elsewhere. Blue Water's Chapter 11 Plan of Liquidation, which has been overwhelmingly approved by creditors, provides for a going-concern sale of the business, a better alternative to a forced liquidation sale in Chapter 7, especially to employees. Mr. Sampson has informed Blue Water's 1,238 employees of the possibility of shutting down operations in 60 to 90 days time, the Ann Arbor News notes. "I'm still hopeful that there can be some resolution," Mr. Sampson said, according to Bloomberg News. Plan confirmation hearing has been adjourned to August 11. Mr. Sampson, in an interview with Bloomberg News, says CIT Group, Inc.'s opposition to Flex-N-Gate's Bid, as well as objections from the other creditors, made Blue Water apprehensive of the United States Bankruptcy Court Eastern District of Michigan's approval of the Bid. CIT Group/Equipment Financing, Inc., and CIT Capital USA, Inc., are owed more than $40,000,000 in collateralized loans. CIT Entities Adversary Proceeding CIT Capital USA, Inc., and CIT Capital Group/Equipment Financing, Inc., assert the existence of an intercompany debt is a violation of each mortgage for the properties, of which contained a provision that Blue Water Automotive Systems Properties, LLC "has no material financial obligations" other than the obligations to the CIT Entities. As the Intercompany Debt exists, BW Properties and Blue Water Automotive Systems, Inc., which controlled BW Properties, were guilty of fraud, Shalom L. Kohn, Esq,. at Sidley Austin LLP, in Chicago, Illinois, avers. The CIT Entities admit that they have received certain transfers within two years of the Petition Date, consisting of proceeds of the Lease from BW Properties to BWASI, which was pledged to CIT Capital pursuant to the Assignment of Leases and Rents. The CIT Entities aver that there was no fraudulent conveyance because BWASI was permitted to occupy the Properties in exchange for the monthly rent. Continued occupancy was the reasonably equivalent value exchange for the transfer, Mr. Kohn asserts. He adds a mere failure of CIT Capital to pay money, as alleged by BWASI is not a transfer from the Debtors and thus cannot give rise to fraudulent conveyance liability. CIT Entities, saying they have no knowledge whether the Debtors paid taxes and insurance, demand the Debtors' proof of payment. CIT Capital contends only BW Properties, being a party to the Mortgage, has the right, prior to an event of default and by submission of invoices, to obtain cash from the Account to pay taxes and insurance. That despite BW Properties' failure to provide invoices, CIT Capital has reimbursed BW Properties $300,071 for the taxes and insurance, Mr. Kohn argues. If CIT Capital had any obligation to remit the funds under the Impound Account, they would be nothing more than a claim against CIT Capital. As BW Properties had an obligation to CIT Capital for $14,981,372, CIT Capital's set-off rights with respect to the Impound Account precludes any recovery from the alleged breach of contract, unless and until CIT Capital's claims against BW Properties are paid in full. CIT Equipment explains that as of May 17, 2006, the value of the assets pledged by BWASI to secure the Equipment Lease exceeded the amounts due on the Lease thus there would be no need for the BWAS Mexico and BW Plastics to resort to the Guaranties. As the Mexican Entities are not creditors of CIT Equipment, they could not be insolvent, and the fact that they have no liabilities means that they could have been solvent, Mr. Kohn reiterates. The CIT Entities assert the disallowance of the CIT Entities' Claims is without merit as the Debtors' arguments cannot stand, the Court cannot grant its request for disallowance. The CIT Entities assert that to the extent that any transfer is sought to be set aside as a fraudulent conveyance, the CIT Entities have the right to retain their liens and enforce their obligations pursuant to Section 548(c) of the Bankruptcy Code. Thus, as the Complaint fails to state a claim, the CIT Entities ask the Court for a summary judgment in their favor with respect to the Complaint. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serve as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtors filed their Liquidation Plan on May 9, 2008. The Plan contemplates a sale of substantially all of the Debtors' assets and equity interests, except for a piece of real property located at Yankee Road, in St. Clair, Michigan. The Plan has been confirmed by the Court. (Blue Water Automotive Bankruptcy News, Issue No. 24, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BOMBAY COMPANY: Court Sets Aug. 20 to Decide on Plan Confirmation ----------------------------------------------------------------- The Hon. D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas set Aug. 20, 2008, at 1:30 p.m. Central Time, as the hearing date to consider confirmation of The Bombay Company Inc. and its debtor-affiliates' First Amended Consolidated Joint Plan of Reorganization. Judge Lynn already approved the Debtors' amended disclosure statement explaining an amended Chapter 11 plan of liquidation on July 2, 2008. As reported in the Troubled Company Reporter on July 9, 2008, Elaine D. Crowley, the appointed liquidation trustee, will issue a share of common stock for The Bombay Company Inc. and become the sole shareholder, officer and director of The Bombay Company Inc., replacing its existing shareholders and company officers. Pursuant to the Plan, all other shares of any class of stock of each of the Debtors will be canceled on the Plan's effective date. A liquidation trust will be created for the benefit of all creditors of the estates holding allowed claims. According to the Plan, the Debtors are expected to transfer any of their assets including (i) cash and accounts, (ii) litigation causes of action, (iii) ownership interest in Bombay Brands LLC, (iv) all other property interests, rights, claims, defenses and causes of action with respect to any and all non-debtor intercompany claims or the Debtors. The Court also fixed Aug. 11, 2008, at 4:00 p.m., as the deadline wherein other parties can submit to the Court their acceptance of the plan or objections to the plan confirmation. The objections must be filed with the Court and served on: Counsel for the Debtors Robert D. Albergotti, Esq. Haynes and Boone LLP 901 Main Street Suite 3100 Dallas, TX 75202 Counsel for the Official Committee of Unsecured Creditors Cathy Herschopf, Esq. Gregory G. Plotko, Esq. Cooley Godward Kronish LLP 1114 Avenue of the Americas New York, NY 10036-7798 Office of the U.S. Trustee Attn: George McElreath Erin Schmidt 1100 Commerce Street, Room 976 Dallas, TX 75242 For creditors, solicitation materials including a copy of the Debtors' disclosure statement, Plan, and a ballot form, are available by contacting the: Balloting Agent AlixPartners LLP Attn: John Franks 2100 McKinney Avenue Suite 800 Dallas, TX 75201 About Bombay Company Based in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/-- designs, sources and markets a unique line of home accessories, wall decor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, LLP, represent the Debtors. The Bombay Furniture Company of Canada Inc. - La Compagnie de Mobilier Bombay Du Canada Inc. -- sought protection from its creditors from the Ontario Superior Court of Justice on Sept. 20, 2007. The U.S. Trustee for Region 6 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Attorneys at Cooley, Godward, Kronish LLP act as counsel to the Unsecured Creditors Committee. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. * * * The Debtors' consolidated monthly operating report for April 30, 2008, showed total assets of $34,100,177 and total liabilities of $31,780,942. CALLIDUS DEBT: S&P Places 'BB-' Notes Rating Under Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class A-2 and A-3 notes issued by Callidus Debt Partners CDO Fund I Ltd., a cash flow arbitrage corporate high-yield collateralized bond obligation transaction, on CreditWatch with positive implications. At the same time, S&P placed its rating on the class C notes on CreditWatch with negative implications. S&P lowered the ratings on the class A-2 and A-3 notes to 'AA' from 'AAA' on June 9, 2008, in connection with the lowering of the financial strength rating on Ambac Assurance Corp. to 'AA/Watch Neg' from 'AAA'. Following a subsequent review of the transaction and paydowns of approximately 35% to the A-2 and A-3 notes, S&P determined that Standard & Poor's underlying ratings on the tranches, which do not give benefit to the financial guarantee from Ambac, provide enough credit support to warrant the placement of the ratings on CreditWatch positive. However, negative credit migration in the underlying asset pool has affected the credit support available to the class C notes, which is why S&P have placed the rating on this tranche on CreditWatch with negative implications. Ratings Placed on Creditwatch Positive Callidus Debt Partners CDO Fund I Ltd. Rating Balance ------ ------- Class To From Original Current ----- -- ---- -------- ------- A-2 AA/Watch Pos AA $264,000,000 $170,780,000 A-3 AA/Watch Pos AA $50,600,000 $32,730,000 Rating Placed on Credtwatch Negative Callidus Debt Partners CDO Fund I Ltd. Rating Balance ------ ------- Class To From Original Current ----- -- ---- -------- ------- C BB-/Watch Neg BB- $18,800,000 $18,800,000 Other Outstanding Rating Callidus Debt Partners CDO Fund I Ltd. Balance ------- Class Rating Original Current ----- ------ -------- ------- B-2 BBB+ $24,700,000 $24,700,000 CANARGO ENERGY: Stockholders Re-Elect Five Directors to Board ------------------------------------------------------------- CanArgo Energy Corporation stockholders re-elected the incumbent Board of Directors comprised of Vincent McDonnell, Jeffrey Wilkins, Russ Hammond, Michael Ayre and Anthony Perry at an annual meeting on July 18, 2008. In addition, the stockholders approved an increase in the authorized shares of common stock from 500,000,000 to 1,000,000,000 and disapproved an increase in the number of shares of common stock that can be awarded under the company's 2004 Long Term Stock Incentive Plan. "With the approval of the increase in authorized shares of common stock the Company can now proceed with the implementation of its previously announced rights offering later this year after complying with all regulatory requirements," Vincent McDonnell, Chairman, President and Chief Executive Officer of the company stated. "The successful completion of the offering, which will be underwritten by certain private investors, should provide the Company with the additional capital required to meet our expected capital needs in the near term enabling us to proceed with the implementation of our planned production enhancement program at the Ninotsminda Field and to continue with our well testing operations at the Manavi 12 well." CanArgo Energy Corporation (AMEX: CNR) -- http://www.canargo.com/ -- is a U.S. company registered in the State of Delaware with headquarters in St. Peter Port, Guernsey, Channel Islands. The company has oil and gas operations currently located in Tbilisi, Georgia. Going Concern Doubt As reported in the Troubled Company Reporter on March 18, 2008, L J Soldinger Associates LLC exressed substantial about CanArgo Energy Corporation's ability to continue as a going concern after it audited the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditor reported that the company has incurred net losses since inception and does not have sufficient funds to execute its business plan or fund operations through the end of 2008. In the three month period ended March 31, 2008, and years ended Dec. 31, 2007, and 2006, the company's revenues from operations did not cover the costs of its operations. The company said that its ability to continue as a going concern is dependent upon raising capital through debt or equity financing on terms acceptable to the company in the immediate short-term. If the company is unable to obtain additional funds when these are required or if the funds cannot be obtained on terms favourable to the company, it may be required to delay, scale back or eliminate its exploration, development and completion program or enter into contractual arran gements with third parties to develop or market products that thecompany would otherwise seek to develop or market itself, or even be required to relinquish its interest in its properties or in the extreme situation, cease operations altogether. CELLEGY PHARMA: Posts $389,000 Net Loss in 2008 Second Quarter -------------------------------------------------------------- Cellegy Pharmaceuticals Inc. reported a net loss of $389,000 for the second quarter ended June 30, 2008, compared with a net loss of $466,000 in the same period last year. The company had no revenues for the three month periods ended June 30, 2008, and 2007, and does not expect to recognize revenue in the foreseeable future. On Feb. 12, 2008, Cellegy entered into a definitive merger agreement providing for the acquisition of Cellegy by Adamis Pharmaceuticals Corporation. Adamis is a privately held specialty pharmaceuticals company that is engaged in the research, development and commercialization of products for the prevention of viral infections, including influenza. Cellegy Pharmaceuticals Inc.'s consolidated balance sheet at June 30, 2008, showed $1,215,000 in total assets, $899,000 in total liabilities, and $316,000 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?301e Going Concern Doubt As reported Troubled Company Reporter on April 1, 2008, Mayer Hoffman McCann P.C., in Plymouth Meeting, Pa., expressed substantial doubt about Cellegy Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm reported that the company has incurred recurring losses from operations and has limited working capital to pursue its business alternatives. In addition, Cellegy says that it may choose to pursue liquidation or voluntarily file bankruptcy proceedings should the company be unable to secure the additional shareholder votes necessary to approve the transaction with Adamis or otherwise be unable to close the transaction. About Cellegy Pharmaceuticals Headquartered in Quakertown, Pa., Cellegy Pharmaceuticals Inc. (OTC BB: CLGY) is a specialty biopharmaceutical company that specializes in women's health. Savvy(R)(C31G vaginal gel), a microbicide gel product for contraception, is currently undergoing Phase 3 clinical studies in the United States for contraception. CFM US: Wants Exclusive Plan Filing Period Extended to October 7 ---------------------------------------------------------------- CFM U.S. Corporation and CFM Majestic U.S. Holdings Inc. ask the United States Bankruptcy Court for the District of Delaware to extend their exclusive periods to: a) file a Chapter 11 plan until Oct. 7, 2008; and b) solicit acceptances of that plan until Dec. 8, 2008. A hearing is set for Aug. 14, 2008, at 11:00 a.m., to consider the Debtors' request. Objections, if any, are due Aug. 7, 2008, at 4:00 p.m. The requested extension of time will permit the Debtors to negotiate a Chapter 11 plan and prepare a disclosure statement explaining that plan. The Debtors tell the Court that they made substantial progress in their Chapter 11 cases, including, among other things: -- obtaining up to $8,000,000 in postpetition financing from Bank of Montreal under a revolving credit facility; and -- completing the sale of substantially all of the Debtors' assets to Monessen Heart Systems Company and Vermont Castings Holding Company for $42,500,000, free and clear of interest and liens. On June 25, 2008, the Court directed the Debtors to deposit 50% of the net proceeds of the sale in a collateralized account maintained by the Debtors with JP Morgan Chase & Co. The Debtors assure the Court that the relief requested will not harm creditors or equity security holder. The requested extension of time will maximize the value of their estate for the benefit of all parties in interest, the Debtors says. The Debtors' exclusive rights to file a Chapter 11 plan will expired on Aug. 8, 2008. About CFM Headquartered in Huntington, Indiana, CFM U.S. Corp. -- http://www.majesticproducts.com/-- manufactures two product categories: Hearth and Heating Products and Barbecue and Outdoor Products. The company and its affiliate, CFM Majestic U.S. Holdings, Inc., filed for Chapter 11 protection on April 9, 2008 (Bankr. D. Del. Lead Case No.08-10668). William Pierce Bowden, Esq., at Ashby & Geddes, represents the Debtors. The Debtors selected Administar Services Group LLC as their claim agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Patrick J. Reilley, Esq., at Cole Schotz Meisel Forman & Leonard, P.A., represents the Committee in these cases. As reported in the Troubled Company Reporter on June 18, 2008, the Debtors' summary of schedules showed total assets of $91,316,300 and total debts of $32,7367,890. CHAD THERAPEUTICS: Has until August 25 to File Delisting Cure Plan ------------------------------------------------------------------ CHAD Therapeutics Inc. received a letter from the American Stock Exchange stating that the company was not in compliance with Section 1003 of the AMEX company Guide. Specifically, the company is not in compliance with Section 1003(a)(i) of the AMEX company Guide with stockholders' equity of less than $2,000,000 and losses from continuing operations and net losses in two out of its three most recent fiscal years, Section 1003(a)(ii) of the AMEX company Guide with stockholders' equity of less than $4,000,000 and losses from continuing operations and net losses in three out of its four most recent fiscal years, and Section 1003(a)(iv) of the AMEX company Guide in that the company has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become impaired so that it appears questionable, in the opinion of the Exchange, as to whether the company will be able to continue operations and meet its obligations as they mature. Furthermore, over the last six months the company has had an average selling price of $0.32 per share of common stock and, as of July 22, 2008, the closing price of the company's Common Stock was $0.16 per share. Therefore, in accordance with section 1003(f)(v) of the AMEX company Guide, the Exchange has deemed it appropriate for the company to effect a reverse stock split, and if not effected within a reasonable amount of time, the Exchange may consider suspending dealings in, or removing from the list, the company's common stock. The non-compliance by the company with Section 1003 of the AMEX company Guide makes the company's common stock subject to being delisted from AMEX. The company is required to submit an initial plan to AMEX by Aug. 25, 2008, advising AMEX of the actions that it intends to take to bring the company into compliance with the continued listing standards set forth in the AMEX company Guide by Oct. 25, 2008. The company is considering its response to the Exchange and as of the date of this statement, has not determined its definitive response to the Exchange. About CHAD Therapeutics headquartered in Chatsworth, California, CHAD Therapeutics Inc. -- http://www.dormiotech.com/-- develops, manufactures, and markets medical devices for the sleep disorder market. CHAD Therapeutics was founded in 1982. Going Concern Doubt As reported in the Troubled company Reporter on July 3, 2008, Rose, Snyder & Jacobs raised substantial doubt on the ability of CHAD Therapeutics Inc. to continue as a going concern after it audited the company's financial statements for the year ended March 31, 2008. The auditor reported that the company has disposed of all of its assets related to its oxygen business, from which it generated all of its revenue, and has sustained recurring operating losses from operations. CIPRICO INC: Seeks Relief Under Chapter 11 in Minnesota ------------------------------------------------------- Ciprico Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code before the U.S. Bankruptcy Court for the District of Minnesota due to slow sales, various sources report. The company elected to seek bankruptcy protection to preserve its assets for the benefit of creditors and stockholders. It is presently evaluating other alternatives to maximize the value of its assets. According to Business Journal, the company was unable to find a purchaser for all or a portion of its assets. The company has $6.9 million in assets, and $7.8 million in debt. The company owes $316,134 to Bell Microproducts, the report says. The company disclosed on May 20, 2008, that it cannot timely file its Form 10-QSB for the quarter ended March 31, 2008, due to headcount reduction in March, which affected the company's finance and accounting team. The company's consolidated balance sheet showed total assets of 14,278,000 and total debts of $7,780,000 resulting in a stockholders' equity of $6,408,000, at Dec. 31, 2007. About Ciprico Headquartered in Minneapolis, Minnesota, Ciprico Inc. (NASDAQ: CPCI) -- http://www.ciprico.com-- provides software to information techonolgy servers, workstations and digital media workflows. CLEAR CHANNEL: Fitch Cuts Issuer Default Rating to B from BB- ------------------------------------------------------------- In-line with prior guidance, Fitch Ratings has downgraded the Issuer Default Rating and outstanding debt rating of Clear Channel Communications, Inc. as: -- IDR to 'B' from 'BB-'; -- Senior unsecured non-guaranteed notes to 'CCC/RR6' from 'BB-'. Fitch has also removed Clear Channel from Rating Watch Negative, where it was originally placed on Oct. 26, 2006. The Rating Outlook is Negative. Additionally, Fitch has withdrawn all existing ratings of Clear Channel. Fitch's downgrade follows the recent announcement that shareholders have approved the acquisition of Clear Channel by certain investors in a highly leveraged transaction. The transaction will result in proforma leverage and coverage of approximately 9 times, and 1.5x, respectively. The IDR and Negative Outlook reflect the weak macroeconomic environment that continues to pressure local advertising sales of traditional media outlets like radio broadcasting as well as the longer-term pressures that secular changes have placed on traditional media. In addition, the ratings and Outlook take into account the company's $1 billion of maturities in 2011, as well as significant principal amortization on the term loans that will begin late 2011. Fitch believes that Clear Channel has separable assets that could be sold if ever needed to de-lever and generally would not impact core operations. While management has never stated such, Fitch believes these assets include Clear Channel's International Outdoor segment that, in Fitch's opinion, does not provide significant synergies with the company's U.S. operations and its Katz Media national rep firm. Proceeds from any asset sales generally have to go towards repayment of the new term loans. Fitch estimates that Clear Channel should be able to generate annual free cash flow of at least $150 million assuming no pay-in- kind election on the toggle notes. Fitch estimates a PIK election could result in an additional $150 million of annual pre-tax cash flows. Other sources of liquidity could come from Clear Channel's $2 billion committed revolver. Fitch does not expect the secular challenges facing radio to be as significant as those facing print media, and believes that the medium will benefit from the continued roll-out of HD radio. Supply issues related to the number of ad spots could be present with HD radio, however Fitch believes the technology should help the industry attract more national advertising. While the outdoor segment is also susceptible to the slowing macro-economic environment, Fitch expects mid-single digit growth and continued margin expansion from the U.S. segment as it continues to roll-out digital billboards and takes market share from other traditional media outlets. The new debt (totaling approximately $18 billion of new senior secured term loans and revolver, and senior unsecured notes, none of which were rated by Fitch) is expected to receive guarantees from Clear Channel's wholly-owned domestic restricted subsidiaries, which Fitch expects to include Clear Channel Holdings, Inc., the parent of Clear Channel Outdoor Holdings, Inc. The 'CCC/RR6' rating on the existing bonds and debentures of Clear Channel that remain outstanding reflect that they are structurally junior to the new debt since it will not receive subsidiary guarantees. The rating withdrawal reflects Fitch's view that the level and timeliness of information available to Fitch going forward may not be sufficient to maintain timely and accurate ratings. CLEARPOINT BUSINESS: Appeals Nasdaq Decision to Delist Securities ----------------------------------------------------------------- ClearPoint Business Resources Inc. requested an appeal of the Nasdaq Listing Qualifications Department's determination to delist the company's securities. On May 22, 2008, it received a letter from The Nasdaq Stock Market indicating that the company is not in compliance with Nasdaq Marketplace Rule 4310(c)(3) which requires the company to maintain either (i) $2,500,000 of stockholders' equity, (ii) $35,000,000 market value of listed securities or (iii) $500,000 of net income from continuing operations for the recently completed fiscal year or two of the last three most recently completed fiscal years. On June 13, 2008, the company provided to Nasdaq a plan to achieve and sustain compliance with all The Nasdaq Capital Market listing requirements, including the time frame for completion of the plan. On July 16, 2008, the Staff notified the company that it had reviewed the company's plan and determined to delist the company's securities from The Nasdaq Capital Market. The company was informed that unless the company requests an appeal of this determination, trading of the company's common stock, units and warrants will be suspended at the opening of business on July 25, 2008, and a Form 25-NSE will be filed with the SEC, which will remove the company's securities from listing and registration on The Nasdaq Capital Market. A hearing date has not yet been set. The appeal stays the suspension and delisting of the company's securities from Nasdaq. There can be no assurance that the company's request for continued listing will be granted. About ClearPoint Business Resources Inc. Based in Chalfont, Pennsylvania, ClearPoint Business Resources Inc., through its proprietary, technology-based iLabor network platform, provides its clients a comprehensive web-based portal to streamline the process involved in procurement and management of temporary labor through a network of ClearPoint-approved staffing vendors. Clearpoint Business Resources Inc.'s consolidated balance sheet at March 31, 2008, showed $10,264,003 in total assets and $26,251,109 in total liabilities, resulting in a $15,987,106 total stockholders' deficit. M&T Credit Pact Default As disclosed in the Troubled company Reporter on June 12, 2008, ClearPoint Business is in default under a credit agreement, dated Feb. 23, 2007, with Manufacturers and Traders Trust company and several lenders. As a consequence of the default, M&T declared all ClearPoint's outstanding obligations under the Credit Agreement to be immediately due and payable and terminated the lenders' obligation to make any additional loans or issue additional letters of credit to ClearPoint. ClearPoint is in the process of negotiating a financing arrangement with a potential lender. However, there is no assurance that ClearPoint's capital raising efforts will be able to attract the additional capital or other funds it needs to sustain its operations. Due to ClearPoint's financial position and results of operations, on May 30, 2008, ClearPoint scaled back various aspects of its operations. If ClearPoint is unable to obtain additional funding, or such funding is not available on acceptable terms, this will materially adversely impact ClearPoint's ability to continue operations. COMFORCE CORP: Launches $5MM Final Redemption of 12% Senior Notes ----------------------------------------------------------------- Comforce Corporation requested Wilmington Trust, trustee for the indenture, to send a notice of redemption in order to redeem, on Aug. 25, 2008, all of its outstanding 12% senior notes due Dec. 1, 2010, at a redemption price equal to 102% of the outstanding principal amount of the senior notes or $5,216,000, plus accrued interest from June 1, 2008, to the scheduled redemption date. The total redemption price, including accrued interest and the 2% premium, will be $5,466,368. Comforce expects to utilize loan proceeds under its bank credit facility to effect this redemption of its senior notes on the scheduled redemption date. Upon completion of this redemption, none of our 12% senior notes will remain outstanding. "We are pleased to be in a position to complete the redemption of all of our 12% senior notes," John Fanning, chairman and chief executive officer of Comforce, said. "Subject to satisfying all conditions under our bank credit facility, we will use proceeds under the facility to eliminate our remaining public debt, which stood at $138.8 million in June 2000. Our management team has been patient and diligent in seeking opportunities to reduce our higher interest rate public debt, and I commend our team in helping the Company to achieve significant interest savings and improve its capital structure." Headquartered in Woodbury, New York, Comforce Corporation (AMEX: CFS) -- http://www.Comforce.com/-- is a provider of outsourced staffing management services that enable Fortune 1000 companies and other large employers to consolidate, automate and manage staffing, compliance and oversight processes for their contingent workforces. The company also provides specialty staffing, consulting and other outsourcing services to Fortune 1000 companies and other large employers for their healthcare support, technical and engineering, information technology, telecommunications and other staffing needs. The company operates in three segments -- Human Capital Management Services, Staff Augmentation and Financial Outsourcing Services. The Human Capital Management Services segment provides consulting services for managing the contingent workforce through its PRO(R) Unlimited subsidiary. The Staff Augmentation segment provides healthcare support services, including RightSourcing(R) Vendor Management Services, Technical, Information Technology and Other Staffing Services. The Financial Outsourcing Services segment provides funding and back office support services to independent consulting and staffing companies. At March 30, 2008, the company's consolidated balance sheet showed $190.4 million in total assets and $198.7 million in total liabilities, resulting in a $8.3 million total stockholders' deficit. CREDIT AND REPACKAGED SECURITIES: Moody's Cuts Notes Rating to Ba3 ------------------------------------------------------------------ Moody's Investors Service downgraded its ratings of these notes issued by Credit and Repackaged Securities Limited 2006-1: Class Description: U.S. $20,000,000 Tranche Notes due March 20, 2013 Prior Rating: Ba2, on review for possible downgrade Current Rating: Ba3 Moody's explained that today's rating action reflects the deterioration in the credit quality of the transaction's reference portfolio, which consists primarily of corporate bonds. Credit and Repackaged Securities Limited is a static synthetic transaction referencing a pool of corporate bonds. It was originated in March, 2006. CREDIT AND REPACKAGED SECURITIES: Moody's Cuts Rating to Ba1 ------------------------------------------------------------ Moody's Investors Service downgraded its rating on these notes issued by Credit and Repackaged Securities Limited 2005-1: Class Description: U.S. $20,000,000 Tranche Notes due 2009 Prior Rating: Baa3, on review for possible downgrade Current Rating: Ba1 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's reference portfolio, which consists primarily of corporate securities. DELFASCO INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Delfasco, Inc. 15 Bellecor Dr. Industrial Park Place New Castle, DE 19720-0000 Bankruptcy Case No.: 08-11578 Chapter 11 Petition Date: July 28, 2008 Court: District of Delaware (Delaware) Judge: Mary F. Walrath Debtor's Counsel: Steven M. Yoder, Esq. Email: syoder@potteranderson.com Potter Anderson & Corroon, LLP Hercules Plaza 1313 North Market St. Wilmington, DE 19801 Tel: (302) 984-6107 Fax: (302) 778-6107 http://www.potteranderson.com/ Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of 's petition is available for free at: http://bankrupt.com/misc/deb08-11578.pdf DI ROMA FURNITURE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Di Roma Furniture Designs, Inc. 871 NW 167 St. North Miami, FL 33169 Bankruptcy Case No.: 08-20385 Type of Business: The Debtor sells furnitures. Chapter 11 Petition Date: July 25, 2008 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtors' Counsel: Stan L Riskin, Esq. (slriskin@aol.com) 8000 Peters Rd. #A-200 Plantation, FL 33324 Tel: (954) 473-2200 Total Assets: $1,131,200 Total Debts: $1,150,372 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flasb08-20385.pdf DOUGLAS FURNITURE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Douglas Furniture of California, LLC 400 North Continental Boulevard, Suite 250 El Segundo, CA 90245 Bankruptcy Case No.: 8-21292 Type of Business: The Debtor manufactures furnitures. See: http://www.douglasfurniture.com/ Chapter 11 Petition Date: July 25, 2008 Court: Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtors' Counsel: Ron Bender, Esq. (rb@lnbrb.com) Levene, Neale, Bender, Rankin & Brill LLP 10250 Constellation Blvd., Ste. 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229,1244 http://www.lnbrb.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/califcb8-21292.pdf DYNAMERICA MFG: Gets Interim Approval to Use $2MM of DIP Loan ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized DynAmerica Manufacturing LLC to obtain, on an interim basis, up to $2 million in financing from lenders including units of TRW Automotive Holdings Corp., Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on July 23, 2008, the financing will be provided by DynAmerica's customers TRW Vehicle Safety Systems Inc., Autoliv ASP Inc. and Quality Safety Systems Co., The Deal said. The lenders told the Court they consent to DynAmerica accessing up to $2.6 million in financing, on a final basis, Mr. Rochelle says. A hearing is set for Aug. 15, 2008, to consider final approval, he notes. On April 7, DynAmerica missed a payment on its $5.25 million prepetition debt owed to Comerica. The Debtor owes $2.8 million to Comerica, the report noted. According to Bloomberg, secured lender Comerica refused to provide monies for DynAmerica's Chapter 11 case. About DynAmerica Manufacturing Headquartered in Muncie, Indiana, DynAmerica Manufacturing LLC -- http://www.dynamericamfg.com/-- has been providing safety components, such as seat belt buckles, motor housings and brake parts, to the automotive industry for more than 20 years. Its customers include Delphi Corp. and Visteon Corp. DynAmerica also produces electrical parts. DynAmerica also operates a warehouse in West Milton, Ohio, and a manufacturing facility in Monterrey, Mexico. TMB Industries LLC -- http://www.tmbindustries.com/partners.html-- has been investing in the company since 2005. DynAmerica filed its chapter 11 petition on July 18, 2008 (Bankr. D. Del. Case No. 08-11515). Marc S. Casarino, Esq., and James S. Yoder, Esq., Robert A. Kargen, Esq., and Amy E. Vulpio, Esq., at White and Williams LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed assets and debts between $1 million to $10 million each. ECOVENTURE WIGGINS: Regions Bank Wants Chapter 11 Case Dismissed ---------------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Regions Bank NA asks the U.S. Bankruptcy Court for the Middle District of Florida to dismiss the Chapter 11 case of Ecoventure Wiggins Pass Ltd. or, to the extent possible, authorized the appointed Chapter 11 trustee to execute the foreclosure commenced in June 2008. According to Mr. Rochelle, the bank alleges that Ecoventure Wiggin's owner secretly agreed to charge buyers lower prices of at least $7 million. A hearing is set for Aug. 20, 2008, to consider the bank's requests, Mr. Rochelle says. Headquartered in Tampa, Florida, Ecoventure Wiggins Pass, Ltd. develops real estate. The company and two of its affiliates, Aqua at Pelican Isle Yacht Club Marina Inc. and Pelican Isle Yacht Club Partners, Ltd., filed for Chapter 11 protection on June 24, 2008 (Bankr. M.D. Fla. Lead Case No.08-09197). Harley E. Riedel, Esq., and Stephen R. Leslie, Esq., at Stichter, Riedel, Blain & Prosser, represent the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million each. ENVIROTECH INDUSTRIES: Hearing on Environmental Case Set Aug. 11 ---------------------------------------------------------------- A court hearing to decide on the future of 4 million tires sitting on Envirotech Industries International's facility in Mobile is set Aug. 11, 2008, Dan Siegel of ABC15.com (KNXV-TV, Ariz.) reports. A status hearing was held on July 20. On the Aug. 11 hearing, it is expected that a decision will be reached on what to do with the tires. Representing the Arizona Department of Administration in the suit against the Debtor is Robert Hall, Esq. The state would like to terminate the lease and take control of the land, according to the report. The company filed for bankruptcy after failing to pay more than $157,000 in lease to the state of Arizona. FREMONT GENERAL: Completes Sale of FIL's Assets to CapitalSource ---------------------------------------------------------------- Fremont General Corporation completed the sale of a substantial portion of its bank subsidiary, Fremont Investment & Loan's remaining assets, including all of its branches, and 100% of its deposits, to CapitalSource Bank, a California industrial bank and indirect subsidiary of CapitalSource Inc. The transaction was completed pursuant to the purchase and assumption agreement entered into on April 13, 2008. A full-text copy of the purchase and assumption agreement is available for free at http://ResearchArchives.com/t/s?302b At the closing of the transaction, CapitalSource Bank acquired the Bank's entire retail branch network of 22 offices, its participation interest in previously sold commercial real estate loans, real and personal property, cash and certain other assets of the Bank. In addition, CapitalSource Bank assumed 100% of the Bank's deposits, which totaled approximately $5.2 billion. As a result of this transaction, the Bank received a net premium of approximately $100.0 million for the assumed deposits and transferred assets. Pursuant to the agreement, within 30 days after the closing, the parties will confirm the final dollar amount of assets sold and deposits assumed by CapitalSource Bank through preparation of a final closing statement, and, if there are any changes from the amount delivered at the closing, the final net premium to be received by FIL may increase or decrease. After the transfer of its branches to CapitalSource Bank, FIL will no longer accept deposits or conduct any other traditional banking functions of a California industrial bank. Within the next few days, the Bank will be relinquishing its federal deposit insurance to the Federal Deposit Insurance Corporation and surrendering its charter to the California Department of Financial Institutions. The Bank, however, will continue as a California corporation and will be changing its name to Fremont Reorganizing Corporation. About CapitalSource Inc. Headquartered in Chevy Chase, Maryland, CapitalSource Inc. (NYSE:CSE) -- http://www.capitalsource.com/-- is a commercial finance, investment and asset management company focused on the middle market. The company operates as a real estate investment trust, and provides senior and subordinate commercial loans, invest in real estate and residential mortgage assets, and engage in asset management and servicing activities. It operates in three segments: Commercial Finance, Healthcare Net Lease, and Residential Mortgage Investment. About Fremont General Fremont General Corporation (OTC: FMNTQ) -- http://www.fremontgeneral.com/-- is a financial services holding company with $8.8 billion in total assets, at September 30, 2007. The company is engaged in deposit gathering through a retail branch network located in the coastal and Central Valley regions of Southern California through Fremont Investment & Loan. Fremont Investment & Loan funds its operations primarily through deposit accounts sourced through its 22 retail banking branches which are insured up to the maximum legal limit by the FDIC. The Retail Banking Division of the Bank continues to offer a variety of savings and money market products as well as certificates of deposits across its 22 branch network. Customer deposits remain fully insured by the FDIC up to at least $100,000 and retirement accounts remain insured separately up to an additional $250,000. Fremont General filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No.: 08-13421). Robert W. Jones, Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. Peter C. Anderson, the U.S. Trustee for Region 16, has appointed five creditors to serve on an Official Committee of Unsecured Creditors in the case. In its schedules, Fremont General reported $362,227,537 in total assets and $326,529,372 in total debts. When the Debtor filed for protection from its creditors, it listed total assets of $643,197,000 and total debts of $320,630,000. Tiffany Kary of Bloomberg News reported that the Debtor's co- counsel, Scott H. Yun, Esq., at Stutman Treister & Glat, said the assets and debts in the initial court filing were for the period Sept. 30, 2007. The estimates exclude potential recoveries from lawsuits, Ms. Kary said. GIBSON GUITAR: Moody's Affirms B2 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service revised it rating outlook to stable from negative for Gibson Guitar Corp., while at the same time affirming Gibson's other ratings, including its B2 corporate family rating and B3 probability of default rating. The stabilization of the outlook reflects the company's improved operating performance, which has led to more cushion under its financial covenants. "The stable outlook reflects the improved covenant cushion resulting from Gibson's enhanced operating performance and Moody's expectation that the company will maintain adequate liquidity over the next twelve months while complying with its financial covenants" said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. The stable outlook also reflects Moody's expectation that the company will be able to materially maintain its operating performance and improved credit metrics despite the expected continuation of weak discretionary consumer spending for the foreseeable future. The affirmation of the ratings reflects the company's improved credit metrics, despite higher raw material costs and overall weak discretionary consumer spending. For instance, operating margins (measured as EBITA/revenue) for the consolidated group increased to 7% in March 2008 from a little over 6% in 2007, with leverage (defined as adjusted debt/EBITDA) decreasing a half turn to a little under 5x and interest coverage (EBITA/interest) increasing to over 3x. Moody's subscribers can find additional information in the Gibson Credit Opinion published on Moodys.com. The following ratings/assessments were affirmed: Corporate family rating rated at B2; Probability-of-default rating at B3; $50 million senior secured revolving credit facility due 2012 at B2 (LGD3, 31%); $100 million senior secured term loan B due 2014 at B2 (LGD3, 31%) Headquartered in Nashville, Tennessee, Gibson Guitar Corp. primarily manufactures and markets acoustic and electric guitars under the Gibson and Epiphone brand names. The company also sells other stringed instruments and instruments related accessories such as amplifiers, speakers, and picks/straps. GINO FERRI: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Gino Ferri P.O. Box 1210 Mesilla Park, NM 88047-1210 Bankruptcy Case No.: 08-12397 Chapter 11 Petition Date: July 25, 2008 Court: District of New Mexico (Albuquerque) Judge: James S. Starzynski Debtors' Counsel: R. Trey Arvizu, III, Esq. (arvizulawoffices@qwestoffice.net) P.O. Box 1479 Las Cruces, NM 88004-1479 Tel: (575) 527-8600 Fax: (575) 527-1199 Estimated Assets: $1 million to $10 million Estimated Debts: $100,000 and $500,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/nwb08-12397.pdf GSC ABS: Fitch Chips Ratings on Five Notes; Removes Neg. Watch -------------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative five classes of notes issued by GSC ABS CDO 2005-1 Ltd. The following rating actions are effective immediately: -- $140,000,000 class A-1S to 'B' from 'A-'; -- $56,000,000 class A-1J to 'CCC' from 'BBB'; -- $48,000,000 class A-2 to 'CC' from 'BBB-'; -- $26,000,000 class A-3 to 'C' from 'BB'; -- $18,575,766 class B to 'C' from 'B+'. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime residential mortgage backed security and structured finance collateralized debt obligations with underlying exposure to subprime RMBS. At the time of the last review conducted in November 2007, approximately 24.5% of the portfolio was rated below investment grade. The portion of the portfolio rated below investment grade is now 70.5% while 15.6% of the portfolio is currently on Rating Watch Negative. The collateral deterioration has caused each of the classes A-2, A-3, and B overcollateralization tests to fall below 100% and fail their respective triggers. The failures of these tests are diverting interest proceeds that would otherwise be payable to the classes A-3 and B notes, to the guaranteed investment contract account in reduction of the Remaining Unfunded Notional Amount. Consistent with the current ratings, Fitch expects the class A-3 and B notes to receive only capitalized interest payments in the future with no ultimate principal recovery. The classes are removed from Rating Watch as Fitch believes further negative migration in the portfolio will have a lesser impact on these classes. Additionally, Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. GSC ABS CDO 2005-1 is a hybrid CDO that closed on Jan. 12, 2006 and is managed by GSC Group. The deal gains all of its exposure to structured finance assets synthetically, via a credit default swap. The proceeds from the sale of funded notes were invested in a GIC which will cover credit event and floating amount event losses. GSC ABS CDO 2005-1's portfolio is comprised of primarily subprime RMBS (88.6%), prime RMBS (5.2%), and SF CDOs (3.1%). Subprime RMBS of the 2005, 2006, and 2007 vintages account for approximately 59.5%, 15.0%, and 6.1% of the portfolio, respectively. SF CDOs of the 2005 and 2006 vintages account for approximately 2.0% and 1.1% of the portfolio, respectively. The ratings of the classes A1S, A1J, and A2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate principal amount by the stated maturity date. The ratings of the classes A3 and B notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the aggregate principal amount by the stated maturity date. GSC ABS: Fitch Cuts Notes Ratings on Four Classes; Removes Watch ---------------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative four classes of notes issued by GSC ABS CDO 2006-1c Ltd. These rating actions are effective immediately: -- $54,000,000 Class A-1 Notes downgraded to 'CCC' from 'BBB', removed from Rating Watch Negative; -- $26,000,000 Class B Notes downgraded to 'C' from 'BB-', removed from Rating Watch Negative; -- $40,000,000 Class A-2 Notes downgraded to 'CC' from 'BB+', removed from Rating Watch Negative; -- $19,771,667 Class C Notes downgraded to 'C' from 'B', removed from Rating Watch Negative. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime RMBS. At the time of the last review conducted in November 2007, approximately 25.8% of the portfolio was rated below investment grade. The portion of the portfolio rated below investment grade is now 73.2%, and 15.4% of the portfolio is currently on Rating Watch Negative. The collateral deterioration has caused each of the class A, B, and C OC tests to fall below 100% and fail their respective triggers. The failures of these tests are diverting interest proceeds that would otherwise be payable to the class B and C notes, to the MVS account in reduction of the Remaining Unfunded Notional Amount. Consistent with the current ratings, Fitch expects the class A-3 and B notes to receive only capitalized interest payments in the future with no ultimate principal recovery. The classes are removed from Rating Watch as Fitch believes further negative migration in the portfolio will have a lesser impact on these classes. Additionally, Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. GSC ABS CDO 2006-1c, Ltd. is a hybrid collateralized debt obligation which closed March 31, 2006, and is managed by GSC Group. The deal gains all of its exposure to structured finance assets synthetically, via a credit default swap. The proceeds from the sale of funded notes are held in a Market Value Swap account which will cover credit event and floating amount event losses. The portfolio is composed of primarily of subprime RMBS (89.4%) and CMBS (8.6%). Subprime RMBS of the 2005, 2006, and 2007 vintages account for approximately 63.7%, 15.9%, and 3.5% of the portfolio, respectively. The ratings of the class A-1 and A-2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class B and C notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. HEARTLAND INC: To Purchase Lee Companies for $3,250,000 in Cash --------------------------------------------------------------- Heartland, Inc. entered into a Letter of Intent with Lee Oil Company, Inc., Lee's Food Marts, LLC and Lee Enterprises, Inc. and the owners of the Lee Companies, pursuant to which the Lee Sellers agreed to sell and the company agreed to purchase the Lee Companies on or prior to Sept. 30, 2008 unless extended. Terry, the CEO and Chairman of the company, is also an owner of the Lee Companies. Mr. Lee abstained from all activity in connection with the negotiation or structuring of the acquisition. The purchase price for the Lee Companies $3,250,000 in cash, 2,500,000 shares of the company and a promissory note for $3,250,000 with a 20-year amortization with a fixed interest rate of 8% with a monthly payment of $27,184.30 beginning 30 days from closing and continuing monthly until paid in full secured by all collateral, which such security shall be second in priority to the company's lender that finances the transaction. Sellers have agreed to refrain Sept. 30, 2008 from soliciting, initiating, encouraging, or accepting any proposal relating to the liquidation, purchase or sale of the Lee Companies or from participating in any negotiations or discussions relating to these matters. Except for the exclusivity and choice of law provisions, this LOI is non-binding. The LOI calls for the completion of definitive documentation and completion of due diligence prior to Sept. 30, 2008. Final closing is subject to approval of the final definitive agreements by the Boards of Directors of the company. There is no guarantee that the parties will reach a final agreement, that the company will be able to raise the required funds to close the transaction or that the transaction will close on the terms set forth as agreed in the LOI. About Heartland Inc. Headquartered in Middlesboro, Ky., Heartland Inc. (OTC BB: HTLJ.OB) -- http://www.heartlandholdingsinc.com/-- through its subsidiary, Mound Technologies Inc. of Springboro, Ohio, is engaged in the business of steel fabrication. Going Concern Doubt Meyler & Company LLC, in Middletown, New Jersey, expressed substantial doubt about Heartland Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's loss from continuing operations of $1,090,267 in 2007 and accumulated deficit of $14,958,608 at Dec. 31, 2007. In addition, the auditing firm said that there are existing uncertain conditions which the company faces relative to its obtaining capital in the equity markets. IGNITION POINT: Dir. Robert Neal Retires as Board Director ---------------------------------------------------------- Ignition Point Technologies Corp. disclosed the retirement of Robert Neal from the company's board of directors. "On behalf of the board of directors, I would like to thank [Mr. Neal] for his contributions as a director and member of the company's audit committee," Michael Cytrynbaum, chair of the board of Ignition Point, stated. "[Mr. Neal] brought telecom, technology and internet sector experience to the Board that will be missed." The company will start a search for a new director to replace Mr. Neal. Michael Cytrynbaum will replace Mr. Neal as a member of the company's audit committee. Headquartered in Vancouver, Ignition Point Technologies Corp. (TSX-V:IPN) -- http://www.ignitionpoint.ca/-- is a broadband communications company providing innovative solutions to expand connectivity to public and private networks. Ignition Point's 68.6% owned operating subsidiary is TeraSpan Networks Inc. -- http://www.teraspan.com/-- At March 31, 2008, the company's balance sheet showed total assets of C$2.5 million and total liabilities of C$3.9 million, resulting in a shareholders' deficiency of C$1.4 million. INDYMAC BANCORP: Oct. 14 Set as Bar Date for IndyMac Bank Claims ---------------------------------------------------------------- The Federal Deposit Insurance Corporation, the receiver for the failed institution IndyMac Bank, F.S.B., set Oct. 14, 2008 as the deadline for creditors having claims against IndyMac Bank to file their proofs of claim. IndyMac Bank was closed on July 11, 2008 by the Office of Thrift Supervision and appointed FDIC as the bank's receiver. All creditors wanting to assert claims must file their proofs of claim at: Dale Gentili FDIC as Receiver of IndyMac Bank, F.S.B. 1601 Bryan Street Dallas, TX 75201 About IndyMac Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. * * * As reported by the Troubled Company Reporter on July 11, 2008, Standard & Poor's Ratings Services lowered its rating on Indymac Bancorp and its subsidiaries, including lowering the counterparty credit rating on Indymac, to 'CCC/C' from 'B/C'. "We took this action because we believe that Indymac's weakened financial profile and exposure to deteriorating housing markets leaves its creditworthiness severely impaired," said Standard & Poor's credit analyst Robert B. Hoban, Jr. On July 9, the TCR said Fitch Ratings downgraded the long-term Issuer Default Ratings of Indymac Bancorp to 'CC' from 'B-'; and the long-term Issuer Default Ratings of Indymac Bank FSB to 'CCC' from 'B'. The downgrade follows IMB's disclosure that, according to its regulators, the bank is no longer 'well capitalized'. Concurrent with this rating action, Fitch has removed all ratings from Rating Watch Negative. The Rating Outlook is Negative for IMB. As reported in the Troubled Company Reporter on Feb. 22, 2008, Standard & Poor's Ratings Services lowered its ratings on five classes of asset-backed certificates from IndyMac Bank FSB's series SPMD 2002-A and SPMD 2002-B. Concurrently, S&P removed three of the lowered ratings from CreditWatch with negative implications. Additionally, S&P affirmed its ratings on the remaining classes from these two series. INDYMAC BANCORP: Insured Deposits Recoverable at IndyMac Federal -------------------------------------------------------------- The Federal Deposit Insurance Corporation, the appointed receiver for the failed institution IndyMac Bank, F.S.B., urged insured depositors of the bank to claim ownership of their deposits at a new institution were their deposits were transferred. IndyMac Bank was closed on July 11, 2008 by the Office of Thrift Supervision and appointed FDIC as the bank's receiver. The FDIC then arranged for the transfer of the insured deposits from the bank to another insured depository institution, IndyMac Federal Bank, F.S.B., at Pasadena, California. FDIC said that the transfer will minimize the inconvenience that the bank's closing has caused the insured depositors. FDIC added that federal law requires depositors to claim ownership of their deposits at the IndyMac Federal Bank within 18 months from the closing date. Deposits not claimed by Jan. 11, 2010 will be transferred back to FDIC. About IndyMac Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originated mortgages in all 50 states of the United States. Through its hybrid thrift- mortgage bank business model, IndyMac designed, manufactured, and distributing cost-efficient financing for the acquisition, development, and improvement of single-family homes. IndyMac also provided financing secured by single-family homes to facilitate consumers' personal financial goals and strategically invests in single-family mortgage-related assets. * * * As reported by the Troubled Company Reporter on July 11, 2008, Standard & Poor's Ratings Services lowered its rating on Indymac Bancorp and its subsidiaries, including lowering the counterparty credit rating on Indymac, to 'CCC/C' from 'B/C'. "We took this action because we believe that Indymac's weakened financial profile and exposure to deteriorating housing markets leaves its creditworthiness severely impaired," said Standard & Poor's credit analyst Robert B. Hoban, Jr. On July 9, the TCR said Fitch Ratings downgraded the long-term Issuer Default Ratings of Indymac Bancorp to 'CC' from 'B-'; and the long-term Issuer Default Ratings of Indymac Bank FSB to 'CCC' from 'B'. The downgrade follows IMB's disclosure that, according to its regulators, the bank is no longer 'well capitalized'. Concurrent with this rating action, Fitch has removed all ratings from Rating Watch Negative. The Rating Outlook is Negative for IMB. As reported in the Troubled Company Reporter on Feb. 22, 2008, Standard & Poor's Ratings Services lowered its ratings on five classes of asset-backed certificates from IndyMac Bank FSB's series SPMD 2002-A and SPMD 2002-B. Concurrently, S&P removed three of the lowered ratings from CreditWatch with negative implications. Additionally, S&P affirmed its ratings on the remaining classes from these two series. INFE-HUMAN RESOURCES: May 31 Balance Sheet Upside-Down by $418,582 ------------------------------------------------------------------ INFe-Human Resources Inc.'s consolidated balance sheet at May 31, 2008, showed $3,041,309 in total assets and $3,459,891 in total liabilities, resulting in a $418,582 total stockholders' deficit. At May 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $754,682 in total current assets available to pay $3,038,469 in total current liabilities. The company reported a net loss of $842,113 on revenues of $1,798,348 for the second quarter ended May 31, 2008, compared with a net loss of $459,662 on revenues of $2,397,640 in the same period ended May 31, 2007. The decrease in revenues reflects a reduction in permanent placement fees of $72,000 caused by reduced placement activity, a reduction in revenue from the staffing operations of the company's Empire organization of $108,000, and a reduction in revenue from staffing operations of the company's Cosmo/Mazel organization of $485,000. In addition, staffing revenues of the company's Monarch organization increased by $66,000. On a year to year basis, staffing operations showed a quarterly profit of $84,153 versus a profit of $159,941 for same period in 2007. The decrease in income was due to the decrease in gross profit from yet to be eliminated low margin/high cost business and the decrease in sales due to the economic downturn which was partially offset by the decrease in selling, general and administrative expenses. Loss from Daniels Advisory Consulting operations for the three months ended May 31, 2008, was $291,945 compared to $426,147 for the comparable period of 2007, a decrease of $134,202 or 31.5%. The decrease reflects the decision by the company to slow the roll out and promotion of Daniels Advisory Consulting to concentrate on the core staffing business. Net interest expense was $563,419 and $155,874 for the three months ended May 31, 2008, and May 31, 2007, respectively, an increase of $407,545 or 261.5%. Full-text copies of the company's consolidated financial statements for the quarter ended May 31, 2008, are available for free at http://researcharchives.com/t/s?3020 Going Concern Doubt Miller Ellin Company, LLP expressed substantial doubt about Infe Human Resources Inc.'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 net losses for the years ended Nov. 30, 2007, and 2006. The auditing firm also stated that the company has long-term liabilities and current operating expenses substantially in excess of its working capital. The company has incurred operating losses, and as of May 31, 2008, the company had a working capital deficit of $2,283,787 and an accumulated deficit of $5,173,432. About INFe-Human Resources Based in New York, INFe-Human Resources Inc. (OTC BB: IFHR.OB) -- through its subsidiaries, provides human resource administrative management, executive compensation plans, and staffing services to client companies in the United States. Through the company's wholly owned subsidiary, Daniels Corporate Advisory Company Inc., the company offers: (a) corporate financial consulting and (b) merchant banking. The company's corporate financial consulting provides advisory services to client companies. Merchant banking includes equity funding of the growth of client and payroll service companies, as well as funding equity of small public companies. INFORMATION TECHNOLOGY: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Information Technology Systems, LLC aka ITS 230 Buras Street Luling, LA 70070 Bankruptcy Case No.: 08-11758 Chapter 11 Petition Date: July 25, 2008 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtors' Counsel: William E. Steffes, Esq. (bsteffes@steffeslaw.com) Steffes Vingiello & McKenzie LLC 13702 Coursey Boulevard, Building 3 Baton Rouge, LA 70817 Tel: (225) 751-1751 Fax: (225) 751-1998 http://steffeslaw.com/ Estimated Assets: $100,000 to $500,000 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/laeb08-11758.pdf INNOVATIVE COMM: Case Trustee, et al. Snub Ex-CEO's Purchase Bid ---------------------------------------------------------------- The offer of former Innovative Communication Corp. owner and CEO, Jeffrey Prosser, to acquire the assets of Innovative Communications Corporation wasn't welcomed, The Deal's Chris Nolter writes. The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania heard on July 23, 2008, issues on the standing of Mr. Prosser, in the chapter 11 case of Innovative Communication. However, Judge Fitzgerald did not rule, The Deal relates. Stan Springel of Alvarez & Marsal, the Court-appointed chapter 11 trustee in Innovative Communication's case, said that Mr. Prosser is "completely and hopelessly out of the money" pointing to the conversion of Mr. Prosser's personal chapter 11 bankruptcy case to a chapter 7 liquidation proceeding. Mr. Springel asserted that Mr. Prosser has no standing in the chapter 11 case, The Deal relates. The Deal says that the relationship between Messrs. Prosser and Springel has turned sour. Counsel to Mr. Springel, Dan Stewart, Esq., at Vinson & Elkins LLP, called Mr. Prosser as "an unemployed bankrupt chapter 7 debtor with no apparent or disclosed wherewithal to close a deal," The Deal notes. Debtor counsel, Robert Craig, Esq., however said that Mr. Prosser may get financing outside the bankruptcy in order to join in the bidding for Innovative Communication's assets, The Deal reports. The Troubled Company Reporter said on June 12, 2008, that Greenlight Capital LLC had told Judge Fitzgerald that the bidding process involving the assets of Innovative Communication" in U.S. Virgin Islands is going poorly." This marked another delay in the public sale of Innovative's assets, which was initially set for May 12, 2008, but was subsequently moved to June 16. The Deal says that Mr. Springel has suspended that auction altogether. Greenlight, which is owed $130 million by the Debtor, asserted that bidders have not offered to buy the assets at a price sufficient to satisfy secured debts. Greenlight also said that the estate is administratively insolvent. Mr. Stewart denied Greenlight's allegations and said that offers for the assets has been significant. Mr. Stewart said that Innovative and its affiliates are paying their debts on time and that the Debtors' operations are financially sound. Mr. Stewart explained that bidders need to check the assets in the U.S. Virgin Islands, hence the delay of the auction. Largest creditor, Rural Telephone Finance Cooperative, denied Greenlight's statement that it is uninterested in offering credit bid at the auction. According to RTFC, which is owed $525 million, it will maintain its credit bid right. The Deal relates that Greenlight filed an involuntary bankruptcy petition against Mr. Prosser and Innovative Communication in February 2006. A few months after that bankruptcy filing, the Debtors consented to pay Greenlight and RTFC $402 million under a settlement agreement. However, Mr. Prosser failed to complete a financing deal by a June 30, 2006, deadline, The Deal notes. According to The Deal, Mr. Springel has filed various suits against Mr. Prosser in order to recover assets. Mr. Prosser, in turn, depended on a fifth amendment protections, which reportedly dismayed Mr. Springel and creditors, The Deal writes. The fifth amendment of the U.S. Constitution, a part of the Bill of Rights, states that "[n]o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." Judge Fitzgerald said that Mr. Prosser's party should take the fifth amendment protections on grounds of being criminally culpable for something, The Deal says. The judge added that based on evidence, "there's probably something wrong" with the U.S. attorney if it doesn't find the party criminally involved, The Deal notes. Mr. Craig, however, commented that even if creditors and the case trustee are going to win in all the lawsuits, they aren't going to recover the money they have spent chasing after Mr. Prosser, The Deal adds. About Innovative Communication/Jeffrey Prosser Based in Christiansted, St. Croix, U.S. Virgin Islands, Innovative Communication Corporation is telecommunications and media company with extensive holdings throughout the Caribbean basin. The company's operations are in Belize, British Virgin Islands, Guadeloupe, Martinique, Saint-Martin, Sint Maarten, U.S. Virgin Islands and France and include local, long distance and cellular telephone companies, Internet access providers, cable television companies, business systems, and The Virgin Islands Daily News, a Pulitzer Prize-winning newspaper. On Feb. 10, 2006, creditors Greenlight Capital Qualified LP, Greenlight Capital LP, and Greenlight Capital Offshore Ltd., filed involuntary chapter 11 petition against Innovative Communication Company LLC and Emerging Communications Inc., and Jeffrey J. Prosser, the company's principal (Bankr. D. Del. Case Nos. 06-10133 through 06-10135). The Greenlight creditors disclosed $18,780,614 in total claims. On July 31, 2006, Innovative LLC, Emerging, and Mr. Prosser, filed voluntary chapter 11 petitions (Bankr. D. V.I. Case Nos. 06-30007 through 06-30009). Pursuant to Rule 1003-1 of the Local Bankruptcy Rules of the District Court of the Virgin Islands, Bankruptcy Division, Mr. Prosser, and Bobby Lubana, were designated as the individuals who are the principal operating officers of the alleged debtor. On Dec. 14, 2006, the Delaware Bankruptcy Court entered an order transferring the venue of the involuntary bankruptcy cases transferring to the U.S. District Court for the District of the Virgin Islands, Bankruptcy Division. On July 5, 2007, the Greenlight creditors filed an involuntary chapter 11 petition against Innovative Communication Corporation (Bankr. D. V.I. Case No. 07-30012). The creditors disclosed total aggregate claims of $56,341,843. Matthew J. Duensing, Esq., and Richard H. Dollison, Esq., at Stryker, Duensing, Casner & Dollison, and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the creditors. Stan Springel of Alvarez & Marsal, the Court-appointed chapter 11 trustee, is represented by Dan Stewart, Esq., of Vinson & Elkins LLP. The Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania approved, Oct. 3, 2007, an order converting Jeffrey Prosser's personal bankruptcy case from chapter 11 reorganization to chapter 7 liquidation. Judge Fitzgerald placed Innovative Communication Corporation in chapter 11 bankruptcy over the objections of its principal, Jeffrey Prosser. JED OIL: AMEX to Delist Stocks; Additional Cure Plan Due August 5 ----------------------------------------------------------------- JED Oil Inc. received a second notice from the American Stock Exchange, in addition to the notice dated April 12, 2007, from AMEX that at Dec. 31, 2006, the company is 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 recent fiscal years. As the company has previously advised, JED started operations in 2004 and sustained losses in that start-up year, well as losses and a deficit position in shareholders' equity in 2006 due to large write-downs of assets. JED submitted a detailed plan to AMEX in May 2007 outlining the steps it has taken and will take to bring the company back into compliance no later than Oct. 13, 2008, which was accepted. The second notice dated July 15, 2008, 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 the Additional Plan is approved by AMEX, 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. "JED's Additional Plan will consist of the initiatives already in progress by the company for the redemption of the Convertible Notes, including the previously announced appointment of CB Securities Inc. as selling agent for JED's northern Alberta oil and gas assets," Justin Yorke, chairman of the audit committee, stated. 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 As reported in the Troubled company Reporter on June 5, 2008, JED Oil Inc.'s consolidated balance sheet at March 31, 2008, showed $90.5 million in total assets, $76.4 million in total liabilities, and $28.5 million in convertible redeemable preferred shares, resulting in a $14.4 million total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $15.2 million in total current assets available to pay $72.0 million in total current liabilities. Going Concern Doubt At March 31, 2008, the company had a consolidated working capital deficiency of $56.8 million and a stockholder's deficiency of $14.4 million. 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 company does not currently have a loan facility. JEFFERSON COUNTY: Majority of Commissioners Oppose Bankruptcy ------------------------------------------------------------- Three Jefferson County Commissioners are against a proposal to file Chapter 9 municipal bankruptcy for the county, Barnett Wright of The Birmingham News reports. Commission President Bettye Fine Collins and Commissioners Shelia Smoot and George Bowman are against a proposal by Alabama state pension chief David Bronner for the Retirement Systems of Alabama to buy the deeply indebted sewer system to save it from bankruptcy. According to the report, Mr. Bronner said the RSA would consider offering up to $2 billion for the system. The money will go to retire the system's $3.2 billion debt. The county's creditors would either have to take a loss or pursue three Wall Street firms that insured the county's debt, he said, according to the report. Commissioners Jim Carns and Bobby Humphryes support Mr. Bronner's plan. Negotiations with Wall Street bankers and creditors are continuing. The latest proposal includes issuing new bonds to refinance the county debt, raising property taxes, doubling business license fees and extending a countywide sales tax until 2048. Mr. Bowman said the plan would harm ratepayers and taxpayers. Gov. Bob Riley is also not sold out to the idea to raise taxes on the citizens to solve the sewer debt problem. Aug. 1 Deadline to Pay $47MM Sewer Debt Jefferson County attorneys and the bond insurers are in negotiations to reset the county's debt structure. Without restructuring, annual payments could soar to $250 million, Reuters had reported. After several extensions, the county was scheduled to pay $47 million of its sewer debt on June 1 and another payment of $53 million due on July 1. As reported by the Troubled Company Reporter on June 5, 2008, the Commission unanimously approved an agreement to extend to Aug. 1 a $47 million sewer debt payment due to eight banks. Under the new agreement, the county will pay $10.6 million toward the principal owed to banks including Regions Bank and Bank of America Corp. The county's bond insurers would also pay $10.6 million of the debt. Jefferson County has $4.6 billion in overall debt, including $3.2 billion in sewer bonds. The county was required to post a collateral on interest-rate swaps tied to the bonds after a series of downgrades on the debt. Two of the firms that guarantee to make the payments on Jefferson County's sewer bonds in the event of default were FGIC Corp. and XL Capital Assurance Inc. FGIC insured $1.56 billion of Jefferson County auction-rate securities, and XL Capital backed $397 million of the bonds. XLCA said that as of June 2, 2008, the Company's exposure to Jefferson County was $810 million, net of reinsurance. XLCA has not established any loss reserves at this time in connection with Jefferson County. Citigroup Replaces Goldman Sachs as Adviser Citigroup Inc. was appointed as part of a new banking team advising Jefferson County after Goldman Sachs Group. Inc. refused to take the job, Martin Z. Braun and William Selway at Bloomberg News reported. As reported by the Troubled Company Reporter on July 9, 2008, the Jefferson County Commission dismissed current advisers Porter, White & Co., Merrill Lynch & Co., and Birmingham law firm Bradley Arant Rose & White as negotiators in their debt restructuring effort. They hired as replacement, Goldman, Sachs & Co.; Birmingham investment bank Sterne, Agee & Leach Inc. and Memphis-based investment firm Morgan Keegan & Co. About Jefferson County Jefferson County has its seat in Birmingham. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. Patrick Darby, a lawyer with the Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. * * * As reported by the Troubled Company Reporter on June 10, 2008, Standard & Poor's Ratings Services' ratings on Jefferson County, Ala.'s series 1997A, series 2001A, series 2003 B-1-A through 2003 B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue bonds ('CCC' underlying rating [SPUR]) remain on CreditWatch with developing implications. On April 1, 2008, Standard & Poor's lowered its SPUR on the county's variable-rate demand series 2003 B-2 through 2003 B-7 sewer revenue refunding warrants to 'D' from 'CCC' due to the sewer system's failure to make a principal payment on the bank warrants when due on April 1, 2008, in accordance with the terms of the standby warrant purchase agreement. As reported by the TCR on July 22, 2008, Moody's Investors Service's continues to review the Caa3 rating on Jefferson County's (AL) $3.2 billion in outstanding sewer revenue warrants for possible downgrade. JHT HOLDINGS: May Access GECC's $25MM DIP Fund on Final Basis ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware on July 25, 2008, gave JHT Holdings Inc. and its debtor-affiliates final approval to tap General Electric Capital Corporation's $25,000,000 postpetition financing under an debtor-in-possession credit agreement dated Dec. 21, 2006. The Court also allowed the Debtors to access prepetition lenders' cash collateral. The final order was issued amid objections from the Official Committee of Unsecured Creditors and Liberty Mutual Insurance Company. On June 25, 2008, the Court issued an interim order allowing the Debtors to access up to $22,000,000 in postpetition credit. Pursuant to prepetition credit agreements, the Debtors, as of the bankruptcy filing, owe GECC and other lenders about $136,000,000. The Debtors granted their prepetition lenders first priority liens and continuing pledges and security interests in substantially all of their assets. GECC serves as agent to both prepetition and postpetition debts. The postpetition debt matures at the earliest of (i) 120 days after the closing date, (ii) the date on which the obligations are accelerated and become due and payable following an event of default, (iii) the date on which the Debtors will sell substantially all of their assets, and (iv) chapter 11 plan effective date. The postpetition credit agreement provides for an underwriting fee of 3.0% of the aggregate revolving credit commitment, unused line fee of 1.0% per annum, letter of credit fee of 6.0%, and interest rate of of LIBOR plus 6% per annum. Objections to the Postpetition Debt The Committee had argued that the Debtors, which are privately held corporations whose major equity holders and prepetition secured lenders substantially overlap. According to the Committee, the prepetition lenders desire to extinguish old equity and convert their debt to new equity. This transaction, the Committee had contested, could easily be accomplished outside of the chapter 11 process. The prepetiton lenders, however, desire to shed the Debtors of undesirable trade debt, the Committee had stressed. The Committee had alleged that the only purpose of the chapter 11 case appears to be to eliminate the claims of general unsecured creditors. Approving of the DIP financing is step one in this effort, the Committee had added. According to the Committee, the DIP financing is used to fill up any possible "holes." The DIP financing includes a $7,400,000 roll-up of undersecured prepetition loans and contains an enormous $9,300,000 cushion, as compared to what financing the Debtors actually appear to need, the Committee had disclosed. The Committee had said that it is given only $25,000, or about $1,450 per Debtor, to investigate the validity of prepetition lenders' liens. The budget also caps the Committee counsel's fees at $100,000 per month and the Committee advisor at not more than $50,000 per month. Meanwhile, the Debtors have budgeted more than $1,200,000 per month in professional fees, Committee had noted. The Committee had added that about $5,800,000 has been set aside under the postpetition debt for favored and unidentified critical vendors. Liberty Mutual, a creditor and party-in-interest, filed a joinder motion in the objection of the Committee relating to the Debtors' DIP fund request. Liberty Mutual is represented by Richard M. Beck, Esq. at Klehr, Harrison, Harvey, Branzburg & Ellers LLP. About JHT Holdings Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. -- http://www.jhtholdings.com/-- and its affiliates provide over- the-road transportation of various types of motor vehicles, including commercial trucks and cars. The Debtors have non-debtor foreign affiliates in Canada and Mexico. Another Mexican affiliate, Mexicana Logistics, S.A. de C.V. is owned 50% by JHT Holdings and 50% by Gustavo Vildosola, a Mexican national with no connection to the Debtors. JHT Acquisition Corp. owns all of the outstanding stock of JHT Holdings. JHT Acquisition is a holding company owned by a group of investors, MTGLQ Investors, L.P., D.B. Zwirn Special Opportunities Fund, L.P., ZM Private Equity Fund I, Spectrum Investment Partners, L.P. and Stonehouse Investment Company LLC. The company and 16 of its affiliates filed for chapter 11 protection on June 24, 2008 (Bankr. D. Del. Lead Case No. 08- 11267). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee has appointed members to the Official Committee of Unsecured Creditors to serve in this case. Pachulski Stang Ziehl & Jones LLP represents the Creditors' Committee. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. JHT HOLDINGS: Court Approves Use of $35 Million Exit Financing -------------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware gave JHT Holdings Inc. and its debtor- affiliates authority to use a proposed exit first-lien revolving loan with a maximum commitment of $35,000,000. The Court also authorized the Debtors to reimburse CIFC Funding 2007-I, Ltd. and CIFC Funding 2007-II, Ltd., prepetition lenders and signatories to a lockup agreement. The reimbursement is intended for prepetition attorneys' fees incurred in connection with the lockup agreement and DIP financing up to a maximum of $20,000. The lockup agreement provides for two exit credit facilities: (i) a first-lien revolving loan with a maximum commitment of $35,000,000, and (ii) a second-lien term loan in the principal amount of $60,000,000. The exit revolving loan will be provided by certain prepetition lenders, consisting of funds collaterally managed by Highland Capital Management L.P. and certain affiliated funds, Spectrum Investment Partners, L.P. and DB Zwirn Special Opportunities Fund, Ltd. The lenders' committed share are: Highland 44.05% Spectrum 21.45% DB Zwirn 34.50% The Debtors have agreed to pay a fee commitment fee equal to 3.0% of the commitment of $35,000,000, or $1,050,000, payable upon entry of a final order approving the DIP Financing but no later than 30 days after the petition date. On the date of payment, the commitment fee will be fully earned and non-refundable. About JHT Holdings Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. -- http://www.jhtholdings.com/-- and its affiliates provide over- the-road transportation of various types of motor vehicles, including commercial trucks and cars. The Debtors have non-debtor foreign affiliates in Canada and Mexico. Another Mexican affiliate, Mexicana Logistics, S.A. de C.V. is owned 50% by JHT Holdings and 50% by Gustavo Vildosola, a Mexican national with no connection to the Debtors. JHT Acquisition Corp. owns all of the outstanding stock of JHT Holdings. JHT Acquisition is a holding company owned by a group of investors, MTGLQ Investors, L.P., D.B. Zwirn Special Opportunities Fund, L.P., ZM Private Equity Fund I, Spectrum Investment Partners, L.P. and Stonehouse Investment Company LLC. The company and 16 of its affiliates filed for chapter 11 protection on June 24, 2008 (Bankr. D. Del. Lead Case No. 08- 11267). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee has appointed members to the Official Committee of Unsecured Creditors to serve in this case. Pachulski Stang Ziehl & Jones LLP represents the Creditors' Committee. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. JHT HOLDINGS: Amends Chapter 11 Plan and Disclosure Statement ------------------------------------------------------------- JHT Holdings Inc. and its debtor-affiliates delivered their amended chapter 11 plan and disclosure statement to the U.S. Bankruptcy Court for the District of Delaware. The plan seeks to convert a substantial portion of the prepetition lenders' secured debt to equity, resulting in prepetition lenders becoming owners of the reorganized company. The Debtors must confirm the plan and go effective within 120 days of the petition date, otherwise a trigger an event of default will occur under their debtor-in-possession financing and an automatic termination under a lockup agreement. This would severely jeopardize the Debtors' reorganization prospects, according to a court document. Treatment of Claims The plan reflects certain agreements and compromises between the Debtors and certain of the prepetition lenders and contemplates, generally: -- payment in full, in cash, of the allowed prepetition advance claims, DIP facility claims, administrative claims and priority claims; -- exchange of the prepetition Lenders' secured claims for, among other things, (i) the exit second-lien loan in the principal amount of $60,000,000, and (ii) 70% of the new stock of reorganized holdings; -- reinstatement of intercompany claims and intercompany interests; and -- discharge of all other claims without recovery, and cancellation of all other equity interests. Type of Claim Projected Claim Projected Recovery or Class or Interest Chapter 11 Chapter 7 ------------- --------------- ---------------------- Administrative $15,000,000 100.0% 100.0% Priority Taxes 20,000 100.0% 100.0% IFTA Taxes 10,000 100.0% 100.0% DIP Facility 14,000,000 100.0% 100.0% Class 1 Prepetition Advanced 1,200,000 100.0% 100.0% Class 2 Prepetition Facilities 136,000,000 48.9% 13.3% Class 3 Other Secured 100.0% 100.0% Class 4 Other Priority 100.0% 100.0% Class 5 Gen. Unsecured 95,000,000 0% 0% Class 6 ESOP Put Claims 6,000,000 0% 0% Class 7 Intercompany Claims reinstated 100.0% Class 8 Intercompany reinstated 100.0% Interests Class 9 Equity Interests 0% 0% The Debtors submit that the plan maximizes their value and that any alternative to confirmation of the plan, such as liquidation or an alternative plan, would result in significant delays, litigation and additional costs. The Court scheduled the hearing to consider adequacy of the disclosure statement for Aug. 6, 2008 at 10:00 a.m., and the hearing to consider confirmation of the plan for Sept. 17, 2008, at 10:00 a.m. A full-text copy of the Debtors' amended disclosure statement is available for free at: http://www.administarllc.com/Asmain/JHTHold/Docket/JHT%20192.pdf A full-text copy of the Debtors' amended chapter 11 plan is available for free at: http://www.administarllc.com/Asmain/JHTHold/Docket/JHT%20191.pdf About JHT Holdings Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. -- http://www.jhtholdings.com/-- and its affiliates provide over- the-road transportation of various types of motor vehicles, including commercial trucks and cars. The Debtors have non-debtor foreign affiliates in Canada and Mexico. Another Mexican affiliate, Mexicana Logistics, S.A. de C.V. is owned 50% by JHT Holdings and 50% by Gustavo Vildosola, a Mexican national with no connection to the Debtors. JHT Acquisition Corp. owns all of the outstanding stock of JHT Holdings. JHT Acquisition is a holding company owned by a group of investors, MTGLQ Investors, L.P., D.B. Zwirn Special Opportunities Fund, L.P., ZM Private Equity Fund I, Spectrum Investment Partners, L.P. and Stonehouse Investment Company LLC. The company and 16 of its affiliates filed for chapter 11 protection on June 24, 2008 (Bankr. D. Del. Lead Case No. 08- 11267). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee has appointed members to the Official Committee of Unsecured Creditors to serve in this case. Pachulski Stang Ziehl & Jones LLP represents the Creditors' Committee. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. JHT HOLDINGS: May Hire Administar as Claims and Notice Agent ------------------------------------------------------------ JHT Holdings Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to engage Administar Services Group LLC as their claims, noticing, and balloting agent. The Debtors had told the Court that it is necessary and in the best interest of their estates and creditors to hire Administar as outside agent to the U.S. Bankruptcy Court Clerk to assume full responsibility for the distribution of notices, proof of claim forms and the maintenance, secondary processing and docketing of all proofs of claim filed in the case. The Debtors had also intended to utilize Administar to mail any proposed disclosure statement, bankruptcy plan, and solicitation materials and may request Administar to tally ballots in connection with voting on any proposed bankruptcy plan. The Debtors had anticipated that there will be 2,800 individuals or entities that will be served with various notices, pleadings, and other documents filed in the case. The Debtors had said that the appointment of Administar will expedite the distribution of of these documents. Administar bills hourly rates of $195 to $215 for presidents and senior vice presidents; $135 to $$175 for vice presidents and executive consultants; $95 to $135 for senior bankruptcy and bankruptcy consultants; $75 to $95 for senior bankruptcy analysts and bankruptcy analysts; and $35 to $55 for administrative and operations personnel and call center attendants. Prior to the bankruptcy filing, the Debtors paid Administar $25,000 adequate assurance payment. About JHT Holdings Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. -- http://www.jhtholdings.com/-- and its affiliates provide over- the-road transportation of various types of motor vehicles, including commercial trucks and cars. The Debtors have non-debtor foreign affiliates in Canada and Mexico. Another Mexican affiliate, Mexicana Logistics, S.A. de C.V. is owned 50% by JHT Holdings and 50% by Gustavo Vildosola, a Mexican national with no connection to the Debtors. JHT Acquisition Corp. owns all of the outstanding stock of JHT Holdings. JHT Acquisition is a holding company owned by a group of investors, MTGLQ Investors, L.P., D.B. Zwirn Special Opportunities Fund, L.P., ZM Private Equity Fund I, Spectrum Investment Partners, L.P. and Stonehouse Investment Company LLC. The company and 16 of its affiliates filed for chapter 11 protection on June 24, 2008 (Bankr. D. Del. Lead Case No. 08- 11267). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee has appointed members to the Official Committee of Unsecured Creditors to serve in this case. Pachulski Stang Ziehl & Jones LLP represents the Creditors' Committee. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. JHT HOLDINGS: Pepper Hamilton Approved as Delaware Counsel ---------------------------------------------------------- JHT Holdings Inc. and its debtor-affiliates obtained permission from the United States Bankruptcy Court for the District of Delaware to employ Pepper Hamilton LLP as their Delaware Counsel. Pepper Hamilton will assist co-counsel in representing the Debtors, among others. Through a separate motion, the Debtors have sought and obtained Court approval to engage Reinhart Boerner Van Deuren S.C. as co-restructuring counsel and general corporate counsel in the bankruptcy case. The Debtors have also obtained approval from the Court to hire Kaye Scholer LLP as its bankruptcy counsel. Pepper Hamilton had received in the aggregate amount of $75,000 pre-filing retainer. The firm's professionals bill at these rates: Designation Hourly Rates ----------- ------------ Partners $450-$695 Associates $240-$345 Legal Assistants $190-$205 David B. Stratton, Esq., a partner at firm, had assured the Court that the firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About JHT Holdings Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. -- http://www.jhtholdings.com/-- and its affiliates provide over- the-road transportation of various types of motor vehicles, including commercial trucks and cars. The Debtors have non-debtor foreign affiliates in Canada and Mexico. Another Mexican affiliate, Mexicana Logistics, S.A. de C.V. is owned 50% by JHT Holdings and 50% by Gustavo Vildosola, a Mexican national with no connection to the Debtors. JHT Acquisition Corp. owns all of the outstanding stock of JHT Holdings. JHT Acquisition is a holding company owned by a group of investors, MTGLQ Investors, L.P., D.B. Zwirn Special Opportunities Fund, L.P., ZM Private Equity Fund I, Spectrum Investment Partners, L.P. and Stonehouse Investment Company LLC. The company and 16 of its affiliates filed for chapter 11 protection on June 24, 2008 (Bankr. D. Del. Lead Case No. 08- 11267). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee has appointed members to the Official Committee of Unsecured Creditors to serve in this case. Pachulski Stang Ziehl & Jones LLP represents the Creditors' Committee. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. JUPITER HIGH-GRADE: Fitch Junks Ratings on Five Classes of Notes ---------------------------------------------------------------- Fitch Ratings has downgraded six classes of notes issued by Jupiter High-Grade CDO II, Ltd. and Jupiter High-Grade CDO II, Inc. as: -- $765,305,823 class A-1 to 'BB-' from 'AA'; -- $35,436,691 class A-2 to 'CCC' from 'AA-', and removed from Rating Watch Negative; -- $40,752,195 class B to 'CC' from 'A+', and removed from Rating Watch Negative; -- $9,948,512 class C-1A to 'C' from 'BB', and removed from Rating Watch Negative; -- $3,468,488 class C-1B to 'C' from 'BB', and removed from Ratings Watch Negative; -- $7,636,219 class C-1C to 'C' from 'BB', and removed from Rating Watch Negative. Jupiter II is a cash collateralized debt obligation that closed on March 29, 2005 and is managed by Maxim Advisory LLC. Jupiter II has a static portfolio of which presently 23.4% is composed of pre-2005 and 2005 vintage U.S. subprime residential mortgage- backed securities, 18.8% consists of pre-2005 and 2005 vintage U.S. SF CDOs, and 8.7% is composed of pre-2005 and 2005 vintage U.S. alternative-A RMBS. Prime RMBS represents 8.8% of the portfolio. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime RMBS, Alt-A RMBS, and SF CDOs with underlying exposure to subprime RMBS. Since Nov. 21, 2007, approximately 39.1% of the portfolio has been downgraded with 17.1% of the portfolio currently on Rating Watch Negative. Close to 21.5% of the portfolio is now rated below investment grade, of which 4.4% is rated 'CCC+' and below. Fitch notes that, overall, 17.8% of the assets in the portfolio now carry a rating below the rating Fitch assumed in November 2007. The negative credit migration experienced since the last review on Nov. 21, 2007 has resulted in the Weighted Average Rating Factor deteriorating to 4.17 from 1.50, breaching its covenant of 1.25, as of the May 30, 2008 Trustee report. The collateral deterioration has caused each of the overcollateralization tests to fall below 100% and fail their respective triggers of 102.52% and 100.41%. As of the trustee report dated May 30, 2008, the class A/B OC ratio was 99.7% and the class C OC ratio was 97.2%. Payment of interest to the classes C-1A, C1B and C-1C notes has been made in kind by writing up the principal balance of each class by the amount of interest owed. The classes are removed from Rating Watch as Fitch believes further negative migration in the portfolio will have a lesser impact on these classes. Additionally, Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. The rating of the classes A-1, A-2, and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the classes C-1A, C-1B, and C-1C notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings are based upon the capital structure of the transaction, the quality of the collateral, and the protections incorporated within the structure. KENNETH HUETE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Kenneth N. Huete, D.C. aka Doctors Chiropractic aka Doctors Chiropractic Health & Rehab Center aka Doctors Spinal Decompression Center of Houston Doctors Chiropractic 3429 W. Holcombe Blvd. Houston, TX 77025 Bankruptcy Case No.: 08-34744 Type of Business: The Debtor provides health care services. Chapter 11 Petition Date: July 27, 2008 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtors' Counsel: Matthew Scott Okin, Esq. (mokin@okinadams.com) Okin & Adams LLP 1113 Vine Street, Suite 201 Houston, TX 77002 Tel: (713) 228-4100 Fax: (888) 865-2118 http://okinadams.com/ 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. LATAM TRUST: Moody's Downgrades Certificates Rating to B1 --------------------------------------------------------- Moody's Investors Service downgraded its rating of these notes issued by Latam Trust Series 2007-103: Class Description: CLP 5,185,000,000 UF-adjusted Certificates due 2036 Credit-Linked to 10 year Tranche Prior Rating: Ba1, on review for possible downgrade Current Rating: B1 Moody's explained that today's rating action reflects the deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of corporate bonds, as well as the negative action taken by Moody's on the Insurance Financial Strength rating of MBIA Insurance Corporation, which acts as GIC provider in the transaction. On June 19, 2008 Moody's downgraded its rating of MBIA Insurance Corporation to A2. Latam Trust Series 2007-103 is a static synthetic transaction referencing a pool of corporate bonds. It was originated in June, 2007. LB-UBS COMMERCIAL: S&P Junks Ratings on Three Certificate Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight classes of commercial mortgage pass-through certificates from LB- UBS Commercial Mortgage Trust 2005-C3. Concurrently, S&P affirmed our ratings on the remaining 17 classes from this transaction. The downgrades reflect anticipated credit support erosion upon the eventual resolution of one specially serviced asset. In addition, the performance of three of the top 10 loans has weakened since issuance, and four loans have reported debt service coverage of less than 1.0x. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The specially serviced asset, Estates at Eagle's Pointe ($20.7 million), is secured by a 450-unit multifamily property at a former Air Force base in Peru, Indiana, 60 miles north of Indianapolis. The loan was transferred to the special servicer, J.E. Robert Co. Inc., in November 2007 due to monetary default. As of June 2008, the property was 81% occupied, up from 70% in December 2007, but the DSC for the property continues to be less than 1.0x. The appraisal indicated a value of $15.25 million as of February 2008. A $7.4 million appraisal reduction amount is in effect for this asset. Standard & Poor's expects a significant loss upon the liquidation of this asset. The master servicer, Wells Fargo Bank N.A., reported a watchlist of 12 loans ($190.5 million, 10%). Crossroads Towne Center ($50.5 million, 3%) is the largest loan on the watchlist. The loan is secured by a 254,589-sq.-ft. retail power center in Gilbert, Arizona. The loan appears on the watchlist because the tenant, Linens 'N Things (11% of net rentable area), has filed for bankruptcy protection; however, the subject store was not on the initial store-closure list. The property was 98% occupied as of December 2007. The remaining loans are on the watchlist primarily because of low occupancy or a decline in DSC since issuance. As of the July 17, 2008, remittance report, the collateral pool consisted of 109 loans with an aggregate pooled trust balance of $1.888 billion, compared with $1.967 billion and the same number of loans at issuance. Wells Fargo reported financial information for 99% of the pool. Excluding $221.1 million of collateral that has since defeased, 85% of the servicer-provided information was full-year 2007 data. Excluding the one asset with the special servicer, there are four loans in the pool totaling $34.4 million (2%) that reported DSCs of less than 1.0x. The loans are secured by industrial, retail, and hotel properties with an average balance of $8.6 million and have reported an average decline in DSC of 52% since issuance. Standard & Poor's calculated a weighted average DSC of 1.54x for the pool, up from 1.51x at issuance. The one specially serviced asset is also the only delinquent loan in the pool. The trust has experienced no losses to date. The top 10 loans have an aggregate outstanding balance of $927.0 million (52%) and a weighted average DSC of 1.60x, down from 1.62x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. One property was characterized as "excellent," and the remaining collateral was characterized as "good." At issuance, 10 loans had credit characteristics consistent with those of investment-grade obligations. However, the Wachovia Portfolio (9%) loan has since defeased. Currently, five of the remaining nine loans continue to exhibit credit characteristics of investment-grade obligations. Details of the two largest loans that continue to exhibit investment-grade characteristics are: -- The largest exposure in the pool, 200 Park Avenue, has a trust balance of $278.5 million (17%) and a whole-loan balance of $900.0 million. The whole loan includes an $848.8 million senior participation that is split into three pari passu pieces, $278.5 million of which is included in the LB-UBS 2005-C3 pooled trust balance. In addition, the borrower's equity interests in the property secure mezzanine loans totaling $450.0 million. The loan is secured by a 58-story, class A office building totaling 2.9 million sq. ft. in Midtown Manhattan. For the year ended December 2007, DSC was 1.79x and occupancy was 99%. Standard & Poor's adjusted net cash flow for this loan is comparable to its level at issuance. -- Courtyard by Marriott Portfolio is the third-largest loan in the pool, with a pooled trust balance of $121.1 million (8%) and a whole-loan balance of $548.3. The whole loan consists of a $475.8 million senior participation that is split into three pari passu pieces, $120.9 million of which serves as collateral in the LB-UBS 2005-C3 transaction. In addition, the borrower's equity interests in the properties secure mezzanine loans totaling $128.9 million. The loan is secured by 64 select-service hotels totaling 9,443 rooms in 29 states. Wells Fargo reported a DSC of 1.75x. Standard & Poor's adjusted NCF for this loan is up 12% from its level at issuance. Details of the two largest loans that no longer exhibit investment-grade characteristics are: -- The 900 North Michigan Avenue loan is the second-largest loan in the pool, with a trust balance of $199.4 million (10%) and a whole-loan balance of $236.4 million. The whole loan consists of a $199.4 million A note and a $37.0 million B note held outside the trust. The loan is secured by 825,356 sq. ft. of a 2.7 million-sq.-ft., mixed-use complex located in downtown Chicago, Illinois. The collateral includes a 475,438-sq.-ft. mall that is anchored by Bloomingdales, and the remaining NRA is primarily office space. For the year ended Dec. 31, 2007, DSC was 1.34x, while occupancy was 95.0%, down from 95.7% at issuance. Operating expenses at the property have increased by 20% since issuance, and Standard & Poor's adjusted NCF for this loan is down 22% from its level at issuance. -- The sixth-largest loan in the pool, Lakeside Commons, has a balance of $46.5 million (2%). The interest-only loan is collateralized by a two-building, 513,677-sq.-ft. office complex in Atlanta, Georgia. As of Dec. 31, 2007, DSC was 1.89x, while occupancy was 97%, up from 87% at issuance. Standard & Poor's adjusted NCF for this exposure is down 8% from issuance, reflecting higher operating expenses. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered LB-UBS Commercial Mortgage Trust 2005-C3 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ J BBB- BBB 3.13% K BB BBB- 2.08% L B+ BB+ 1.69% M B BB 1.56% N B- BB- 1.43% P CCC B+ 1.17% Q CCC- B 1.04% S CCC- B- 0.78% Ratings Affirmed LB-UBS Commercial Mortgage Trust 2005-C3 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 31.25% A-2 AAA 31.25% A-3 AAA 31.25% A-4 AAA 31.25% A-AB AAA 31.25% A-5 AAA 31.25% A-M AAA 20.83% A-J AAA 11.07% B AA+ 9.90% C AA 8.85% D AA- 7.81% E A+ 7.16% F A 6.12% G A- 5.34% H BBB+ 4.17% X-CP AAA N/A X-CL AAA N/A N/A -- Not applicable. LB-UBS COMMERCIAL: S&P Holds Ratings on Good Operating Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on 25 classes of commercial mortgage pass-through certificates from LB- UBS Commercial Mortgage Trust 2005-C5. At the same time, S&P raised its ratings on five classes of commercial mortgage pass- through certificates from 1345 Avenue of the Americas and Park Avenue Plaza Trust's series FB 2005-1. Concurrently, S&P affirmed its ratings on three classes from series FB 2005-1. The affirmed ratings on the LB-UBS 2005-C5 certificates reflect credit enhancement levels that provide adequate support through various stress scenarios. The raised and affirmed ratings on the 1345 Avenue of the Americas and Park Avenue Plaza Trust FB 2005-1 certificates reflect the increased operating performance of the properties, improved market fundamentals, and the amortization of the whole loans. The whole loans secured by 1345 Avenue of the Americas and Park Avenue Plaza are participated in both trusts. The 1345 Avenue of the Americas and Park Avenue Plaza Trust FB 2005-1 certificates derive 100% of their cash flow from the participated interests, which are discussed in further detail below. As of the July 17, 2008, remittance report, LB-UBS 2005-C5's collateral pool consisted of 115 loans with an aggregate trust balance of $2.306 billion, compared with 115 loans totaling $2.344 billion at issuance. The master servicer, Wachovia Bank N.A., reported financial information for 99% of the pool. Ninety- seven percent of the servicer-provided information was full-year 2007 data. There are five loans in the pool totaling $29.2 million (1%) that reported debt service coverage of less than 1.0x. These loans are secured by retail, self-storage, manufactured housing, and multifamily properties with an average balance of $5.8 million. These loans have seen an average decline in DSC of 41% since issuance. Excluding the defeased loans ($5.4 million, 0.2%), Standard & Poor's calculated a weighted average DSC of 1.52x for the pool, up from 1.45x at issuance. There are no delinquent loans in the pool but there is one asset ($5.2 million, 0.2%) with the special servicer, LNR Partners Inc. The trust has experienced no losses to date. The top 10 loans in LB-UBS 2005-C5 are secured by real estate and have an aggregate outstanding balance of $1.326 billion (58%) and a weighted average DSC of 1.56x, up from 1.53x at issuance. Standard & Poor's reviewed property inspections provided by Wachovia for all of the assets underlying the top 10 loans, and all of the properties were characterized as "good." Credit characteristics for six of the loans in the LB-UBS 2005-C5 pool are consistent with those of high investment-grade obligations. Details of the largest loan and the 1345 Avenue of the Americas and Park Avenue Place loans are: -- The largest exposure in the pool, 200 Park Avenue, has a trust balance of $278.5 million (17%) and a whole-loan balance of $900.0 million. The whole loan includes an $848.8 million senior participation that is split with three pari passu components, including $285.1 million that is included in the pooled trust balance and a $51.2 million junior participation that is securitized in another trust. In addition, the borrower's equity interests in the property secure mezzanine loans totaling $450.0 million. The loan is secured by a 58-story, class A office building totaling 2.9 million-sq.-ft. in midtown Manhattan. For the year ended December 2007, the pooled trust balance reported a DSC of 1.79x and occupancy of 99%. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The 12th-largest exposure in the LB-UBS 2005-C5 pool, 1345 Avenue of the Americas, is encumbered by a $720.6 million whole loan. The loan has four senior A participations totaling $422.6 million, two B participations totaling $98.0 million, four C participations totaling $100.0 million, and one D participation totaling $100.0 million. The A-2 note ($42.1 million, 2%) serves as collateral in the LB-UBS 2005-C5 transaction and the A-3, A-4, B-1, and B-2 notes serve as collateral in 1345 Avenue of the Americas and Park Avenue Plaza Trust's series FB 2005-1 stand-alone transaction. The C participations serve as collateral in Hypo Real Estate Bank International AG's series Estate-US1 transaction. The loan is secured by a 1,896,140-sq.-ft. office property in midtown Manhattan. As of March 31, 2008, the property was 99% occupied and the weighted average in-place rent was $63.90. Standard & Poor's adjusted valuation for this loan is up 8% since issuance. -- The 25th-largest exposure in the LB-UBS 2005-C5 pool, Park Avenue Plaza, is encumbered by a $249.2 million whole loan. The loan has four senior A participations totaling $147.9 million, two B participations totaling $1.3 million, and one C participation totaling $100.0 million. In addition, there is $85.0 million of preferred equity secured by the equity interests of the borrower. The A-2 note ($19.4 million, 1%) serves as collateral in the LB-UBS 2005-C5 transaction and the A-3, A-4, B-1, and B-2 notes serve as collateral in 1345 Avenue of the Americas and Park Avenue Plaza Trust's series FB 2005-1 stand-alone transaction. The C participation serves as collateral in Hypo Real Estate Bank International AG's series Estate-US1 transaction. The loan is secured by a 1,137,452-sq.-ft. office property in midtown Manhattan. As of March 31, 2008, the property was 95% occupied and the weighted average in-place rent was $56.06. Standard & Poor's adjusted valuation for this loan is up 29% since issuance. Kmart Greenwood, the only loan with LNR, is a 135,990-sq.-ft. retail property in Greenwood, South Carolina. The loan has a total exposure of $5.3 million, including servicing advances, as well as interest thereon. The loan was transferred to the special servicer in June 2007 because the borrower filed for bankruptcy. The loan remains current and the property is 100% occupied. Standard & Poor's does not expect the resolution of the asset to result in a loss. Wachovia reported a watchlist of 13 loans ($63.3 million, 3%). The largest loan on the watchlist, the Loch Raven Apartments, is the 26th-largest exposure. The loan has an outstanding balance of $17.0 million (1%) and is secured by a 515-unit multifamily property in Baltimore, Maryland. The loan appears on the watchlist because the property reported a year-end DSC of 0.87x; however, a major renovation was recently completed at the property and is now 95% occupied. Standard & Poor's stressed the loans on the master servicer's watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised 1345 Avenue of the Americas and Park Avenue Plaza Trust Commercial mortgage pass-through certificates series FB 2005-1 Rating ------ Class To From ----- -- ---- B AAA AA+ C AAA AA- D AA A+ E A+ A F A A- Ratings Affirmed 1345 Avenue of the Americas and Park Avenue Plaza Trust Commercial mortgage pass-through certificates series FB 2005-1 Class Rating ----- ------ A-2 AAA A-3 AAA X AAA LB-UBS Commercial Mortgage Trust 2005-C5 Commercial mortgage pass-through certificates series 2005-C5 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.50% A-1A AAA 30.50% A-2 AAA 30.50% A-3 AAA 30.50% A-AB AAA 30.50% A-4 AAA 30.50% A-M AAA 20.33% A-J AAA 12.20% B AA+ 11.31% C AA 9.91% D AA- 8.64% E A+ 7.62% F A 6.35% G A- 5.21% H BBB+ 4.19% J BBB 3.56% K BBB- 2.67% L BB+ 2.29% M BB 2.03% N BB- 1.65% P B+ 1.52% Q B 1.27% S B- 1.02% X-CL AAA N/A X-CP AAA N/A N/A -- Not applicable. LEVITT AND SONS: Court Okays Expanded Duties of Depositors Panel ---------------------------------------------------------------- The Home Purchase Deposit Creditors Deposit Holders Committee in Levitt and Sons LLC and its debtor-affiliates' Chapter 11 cases obtained interim permission from the Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida to expand the scope of its engagement to represent deposit holders bringing claims against the Florida homeowners' construction recovery fund. As reported in the Troubled Company Reporter on May 28, 2008, the Debtors, together with the Joint Committee of Unsecured Creditors, asked the Court to impose limitations on the expansion request by the Home Purchase Depositors Panel. The Debtors argued that representing a small group of Deposit Holders who will make claims against the Recovery Fund is inappropriate without the imposition of certain conditions. The Debtors contended earlier that the Deposit Holders are individual creditors and any recovery from the Recovery Fund should be deducted from their claims in the Debtors' bankruptcy cases, with the first recovery applied to reduce any priority claims, and then to reduce the balance of any general unsecured claims. They emphasized that the Deposit Holders should not be entitled to a double recovery. Pursuant to the Court order, in any invoice submitted to the Debtors or fee applications filed with the Court, counsel of the Depositors Committee will separately set forth time entries and expenses incurred in pursuing claims against the Florida Homeowners Construction Recovery Fund. The Depositors Committee's counsel will report its progress to the Court at each pro se calendar or scheduled status conference. The Depositors Committee will be entitled to proceed against the Recovery Fund on behalf of eligible individual depositors as representative of a class of those claimants. Initially, however, the Depositors Committee will proceed on behalf of several test claimants, who will be selected by agreement between the Depositors Committee, the Official Committee of Unsecured Creditors, and the Debtors. To be eligible to proceed as Test Claimants, the Test Claimants and any subsequent claims of Depositors that are eligible for recovery against the Recovery Fund must agree in advance to assign any recoveries received from the Recovery Fund to the Debtors' estates or any successor to the estates. The disposition of the Fund Recoveries will be made pursuant to either any plan filed or by further Court order. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Sunshine Kitchens Seeks to Foreclose Liens ----------------------------------------------------------- Sunshine Kitchens, Inc. sued certain applicable debtor-affiliates of Levitt and Sons LLC and third-party Lexon Insurance Company, seeking to foreclose a series of construction liens for unpaid materials and services the Debtors and Lexon Insurance owe it. Sunshine Kitchens adopted the material allegations and claims against the Debtors and Lexon contained in its amended complaints to foreclose lien against Lexon and Cascades by Levitt and Sons, LLC; Summerport by Levitt and Sons, LLC, formerly known as LD Financial Financial Management, LLC; Avalon Park by Levitt and Sons, LLC, formerly known as LHBC Holdings, LLC; Levitt Homes, LLC; and Magnolia Lakes by Levitt and Sons, LLC. The Amended Complaints to Foreclose Lien were filed in the Circuit Court for the 19th Judicial Circuit in and for St. Lucie County, Florida. Sunshine Kitchens related that it entered into various agreements for the furnishing and installation of kitchen cabinets into certain residences. (1) Avalon Park -- 35 residences (2) Cascades -- 28 residences (3) Levitt Homes -- 16 residences (4) Magnolia Lakes -- 1 residence (5) Summerport -- 16 residences Pursuant to the Cabinet Agreements, Sunshine Kitchens was to furnish labor, materials and equipment for kitchen cabinets and countertops, vanities and tops into the properties during the construction process. In return, Sunshine Kitchens was to be paid in accordance with certain payment schedules. Sunshine Kitchens, however, complained that the Debtors subsequently terminated contractual relationships between them, without legal justification. In its Amended Complaints to Foreclose Lien, Sunshine Kitchens sought the payment of sums, together with interest, due to it for services rendered, and for reasonable attorneys' fees and costs. Sunshine Kitchen asserts payments, which aggregate more than $630,000. Sunshine Kitchen maintained that it has filed and recorded construction claims of lien against the Properties within 90 days after the last labor, materials and services under the Agreement were furnished for the construction. After the recording the Claims of Lien, the Debtors filed certain bonds as surety transferring Sunshine Kitchen's liens to the bonds. A full-text copy of each of the Amended Complaints to Foreclose Lien is available for free at: http://researcharchives.com/t/s?3023 http://researcharchives.com/t/s?3024 http://researcharchives.com/t/s?3025 http://researcharchives.com/t/s?3026 http://researcharchives.com/t/s?3027 Sunshine Kitchens thus asked the Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida to: (a) compel an accounting to be taken under the direction of the Bankruptcy Court for the sums due Sunshine Kitchens for each Claim of Lien and for reasonable attorneys' fees and costs; and (b) direct the Debtors to pay the sums determined in the accounting to be undertaken. If the sums are not paid, Sunshine Kitchens asked the Court to foreclose the Claims of Lien against the Bonds backed by Lexon Insurance. Lexon Replies to Sunshine's Complaint Leyza F. Blanco, Esq., at GrayRobinson, P.A., Esq., in Miami, Florida, on behalf of Lexon Insurance, noted that pursuant to Section 713.06(3)(d)1 of the Florida Statutes, Sunshine Kitchens has no lien or right of action against the Debtors or Lexon Insurance for failing to give the final payment affidavit before instituting the adversary complaint. Pursuant to Section 713.06, to the extent that Sunshine Kitchens is not in privity with the owner of the Properties, it has no lien or right of action against the Debtors or Lexon for failing to serve a notice of owner, Ms. Blanco argued. Sunshine Kitchens has been paid for all the work it rendered consistent with the Cabinet Agreements, Ms. Blanco asserted. Lexon Insurance is entitled to a set-off against any payment otherwise owed to Sunshine Kitchens under the Agreements because of costs to correct and complete or replace cabinets and other materials installed by Sunshine Kitchens, she added. In a separate filing, the Levitt Plaintiffs join in Lexon Insurance's Answer to Sunshine Kitchens' Complaint. Levitt Plaintiffs Seek Partial Summary Judgment The Levitt Plaintiffs ask the Court to enter a summary judgment in their favor, declaring (i) that Sunshine Kitchens failed to comply with a statutory condition precedent concerning the perfection of Claim Nos. 3149, 3151, 3227, 3308, 3516, 3520 and 3525, and (ii) that those claims have now assumed the status of general unsecured claims as a matter of law, subject to any objections by the Debtors or any other party-in-interest. Resolution of this issue only requires the Court to apply state law and determine whether Sunshine Kitchens was required to deliver a contractor's final payment affidavit -- which Sunshine Kitchens admits it did not deliver -- to the Levitt Plaintiffs as a prerequisite to its perfection of liens on real property, Jordi Guso, Esq., at Berger Singerman, P.A., in Miami, Florida, the Debtors' counsel, says. Even where the contractor's affidavit has not been served at the time of a lawsuit, an amended complaint may be filed alleging compliance with the requirement to serve an contractor's affidavit assuming that the applicable statutory limitations period has not expired before the filing of the amended complaint, Ms. Guso notes, citing Holding Electric, Inc. v. Roberts, 530 So. 2D 301 (Fla. 1988). In this case, Sunshine Kitchens did not sue to enforce its liens until nearly the expiration of the one-year statutory limitations period, making it impossible to have served the requisite contractor's affidavit timely, Ms. Guso points out. Sunshine Kitchens' failure to comply with state law in the perfection of its liens results in the disallowance of its secured proofs of claim in the main case, and the Levitt Plaintiffs are entitled to partial summary judgment disallowing the Claims as secured claims, Ms. Guso asserts. Lexon Insurance joins in the Levitt Plaintiffs' summary judgment request. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors have filed a Chapter 11 joint plan of liquidation. (Levitt and Sons Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LORDSHIP DEVELOPMENT: Case Summary and Two Largest Creditors ------------------------------------------------------------ Debtor: Lordship Development, LLC 1121C Military Cutoff Road #321 Wilmington, NC 28405 Bankruptcy Case No.: 08-04965 Related Information: Michele Jean-Baptiste at Team MJB-NC, LLC, Lordship Development's managing member, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 24, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Bankruptcy Counsel: Trawick H. Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 (efile@stubbsperdue.com) Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million List of Largest Unsecured Creditors: Creditor Nature of Claim Claim Amount -------- --------------- ------------ Brunswick County Tax Coll $5,057 Bradley-Barnes Construction Contingent Unknown LORDSHIP DEVELOPMENT: Section 341(a) Meeting Slated for August 19 ----------------------------------------------------------------- Marjorie K. Lynch, the United States Trustee for Region XX will convene a meeting of creditors at 10:00 a.m., on Aug. 19, 2008, at Wilson 341 Meeting Room, Post Office Box 3758, in Wilson, North Carolina. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Wilmington, North Carolina-based Lordship Development, LLC filed its chapter 11 petition on July 24, 2008 (Bankr. E.D.N.C. Case No. 08-04965). Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it estimated assets between $1 million and $10 million and debts between $1 million and $10 million. MCCLATCHY COMPANY: Earns $19.7 Million in 2008 Second Quarter ------------------------------------------------------------- The McClatchy Company disclosed on Thursday results of its second quarter ended June 29, 2008. The company reported net income from continuing operations of $20.1 million. Adjusted earnings from continuing operations excluding several unusual items in the second quarter of 2008 were $17.3 million. Total net income including discontinued operations was $19.7 million. Earnings in the second quarter of 2008 included the impact of several unusual events including: a gain on the sale of a one- third interest in SP Newsprint Company (SP), a gain on the extinguishment of debt related to a bond tender, the charges related to implementing a previously announced restructuring plan, the write-down of certain internet investments and a charge for certain discrete tax items. The company's second quarter 2007 earnings from continuing operations were $34.5 million, and included the effect of an after-tax non-cash loss of $4.7 million, related to the settlement of litigation and amendment to a Joint Operating Agreement paid by the Seattle Times Company (STC) in which McClatchy is a 49.5% owner. The company's total net income for the second fiscal quarter of 2007, including the results of discontinued operations, was $35.2 million. Revenues in the second quarter of 2008 were $489.7 million, down 15.6% from revenues from continuing operations of $580.0 million in the second quarter of 2007. Advertising revenues were $406.3 million, down 16.8% from 2007, and circulation revenues were $66.1 million, down 5.2%. Online advertising revenues grew 12.5% in the second quarter of 2008 and were 11.8% of total advertising revenues compared to 8.6% of total advertising revenues for all of 2007. On March 31, 2008, McClatchy and its partners, affiliates of Cox Enterprises Inc. and Media General Inc., completed the sale of SP Newsprint Company, of which McClatchy was a one-third owner. The pre-tax gain on the sale of SP was $32.0 million and proceeds of $55.0 million from the sale were used to reduce debt. In May 2008, the company purchased $300.0 million aggregate principal amount of its outstanding publicly traded debt securities for $282.4 million and recorded a pre-tax gain of $19.5 million. The company repaid $294.7 million in debt in the second quarter reducing total debt to $2.1 billion from $2.4 billion at the end of the first quarter. On June 16, 2008, the company announced a restructuring plan which is expected to result in $95.0 million to $100.0 million in annual savings over the next four quarters. This plan includes a reduction in workforce of approximately 10% and is expected to result in severance of approximately $30.0 million. The company expects to reduce non-newsprint cash expense in the low double- digit percentage range over the balance of 2008 excluding the severance. Second quarter 2008 results include related severance and retirement plan curtailment charges of $23.3 million. On June 30, 2008, the company sold its 15.0% interest in ShopLocal, LLC for approximately $7.9 million and used the proceeds to reduce debt. A tax benefit from the sale is expected to result in cash tax savings of approximately $5.6 million in the fourth quarter of 2008. The company reduced its carrying value of ShopLocal to match the sales price. In addition, one of the internet companies in which McClatchy has an investment incurred an impairment on a product and as a result, the company recognized a charge related to this investment in the second quarter. The total non-cash pre-tax charges related to impairments of internet investments, including ShopLocal, in the second quarter were $21.5 million. First Six Months Results Income from continuing operations for the first six months of 2008 was $19.1 million. Adjusted earnings from continuing operations were $20.0 million in the first half of 2008. The company's total net income for the first six months of 2008 including the results of discontinued operations was $18.8 million. Earnings from continuing operations for the first half of 2007 were $49.0 million including the settlement of litigation and amendment to a Joint Operating Agreement paid by the Seattle Times Company. The company's total net income, including the results of discontinued operations, for the first half of 2007 was $44.3 million. Discontinued operations reflect the results of the (Minneapolis) Star Tribune newspaper which was sold on March 5, 2007. Revenues from continuing operations in the first six months of 2008 were down 14.7% to $978.0 million compared to $1.1 billion in 2007. Advertising revenues in 2008 totaled $810.4 million, down 16.1% and circulation revenues were $133.9 million, down 5.4%. Online advertising revenues grew 11.5% in the first half of 2008 and represented 11.6% of total advertising revenues. Debt repayments totaled more than $370.0 million in the first six months of 2008 and the company noted that debt was $2.1 billion as of June 29, 2008. Management's Comments Commenting on McClatchy's results, Gary Pruitt, chairman and chief executive officer, said, "Our advertising revenues in the second quarter of 2008 were down in the mid-teen percentage range and continued to be hurt by the weak economy and the secular shift in advertising to the internet. "We were pleased to see strength in our online business in the second quarter, reflected in both audience growth and advertising sales. Through the second quarter, unique visitors to our websites were up 24.7% following 41.4% growth in the first quarter. "Online advertising revenues grew a strong 12.5% in the second quarter of 2008. Excluding employment advertising, which is the category most tied to print up-sell advertising and which has declined nationally both in print and online, our online advertising grew 58.5% in the second quarter of this year. We were pleased to note that nearly 50% of our online advertising came from ads placed only online; they were not tied to a print up-sell. "Despite the strong growth in our online business, the advertising environment continues to be weak and we expect revenues to continue to be down. Whether revenues improve from recent trends depends upon the direction of the overall economy." Pat Talamantes, McClatchy\u2019s chief financial officer, said, "We continue to generate significant cash. Our cash flow, coupled with asset sales and the income tax refund related to our sale of the (Minneapolis) Star Tribune in 2007, allowed us to repay more than $370.0 million of debt in the first half. Debt at the end of the quarter was $2.1 billion, compared to $2.5 billion at the end of 2007. As a result, our interest expense declined $12.9 million or 26% from second quarter 2007. "We have met all of our financial obligations, including the financial covenants in our credit agreement, and we expect to continue to do so. We continue to monitor our financial position and have good relationships with our bank group, and we will seek an amendment to our covenants if necessary. We still expect to make further progress in deleveraging our balance sheet and expect total debt to be in the $2.0 billion range by the end of 2008." About The McClatchy Company Headquartered in Sacramento, California, The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, with 30 daily newspapers, approximately 50 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, the Charlotte Observer, and The (Raleigh) News & Observer. McClatchy also owns a portfolio of premium digital assets, including 14.4% of CareerBuilder, an online job site, and 25.6% of Classified Ventures, a newspaper industry partnership that offers the auto website, cars.com, and the rental site, apartments.com. At March 30, 2008, the company's consolidated balance sheet showed $4.0 billion in total assets, $3.6 billion in total liabilities, and $409.3 million in total stockholders' equity. * * * As reported in the Troubled Company Reporter on July 16, 2008, Douglas McIntyre of 24/7 Wall Street reported that The McClatchy Company could hit debt service problems that could force the company to sell properties or file for Chapter 11 protection. According to the report, McClatchy is one of the companies that are at high risk of not making it another year due to the big debt loads it took in buying newspaper properties and seeing operating income chopped by falling sales. As reported in the Troubled Company Reporter on July 15, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on The McClatchy Co. to 'B+' from 'BB-'. The rating outlook is negative. The issue-level rating on the senior unsecured debt assumed from Knight Ridder Inc. also was lowered, to 'B-' from 'B'. The recovery rating on the Knight Ridder debt remains at '6', indicating the expectation for negligible (0% to 10%) recovery in the event of a payment default. MEADWESTVACO CORP: Moody's Affirms Corporate Family Rating at Ba1 ----------------------------------------------------------------- Moody's Investors Service affirmed MeadWestvaco Corporation's (MWV) corporate family rating and senior unsecured debt rating at Ba1, and the speculative grade liquidity rating at SGL-1. The affirmation follows MWV's release of second quarter 2008 results that were in line with Moody's expectations. Sales across all four of MWV's business segments improved year over year as a result of price increases and product mix, however, operating income and margins were adversely impacted by higher energy, raw material and freight costs. Moody's anticipates that near term growth in emerging markets will be offset by the slowing US economy and the margins will continue to be challenged by rising input costs. In addition, Moody's upgraded approximately $125 million of revenue bonds to A3 from Ba1 as a result of the prior defeasance of these obligations. The rating outlook is stable. MWV's Ba1 rating reflects the company's significant position in the consumer packaging markets and the very stable profit margins that result. The company has very strong committed liquidity arrangements, with minimal near term debt maturities and a fully funded pension plan that is not expected to diminish cash flow. The company's credit profile also benefits from the company's timberland position which provides some backward integration while also providing an additional source of liquidity should it be required. Offsetting these strengths are the impact of competition, the challenging economic environment and rising input costs that may constrain projected margin expansion and free cash flow generation as well as the company's large dividend. Moody's has upgraded the ratings of approximately $125 million of defeased bonds (see list below) to A3 from Ba1 as a result of the defeasance of these obligations in 2005. These bonds were issued in 2002 in connection with an environmental improvement project for the MeadWestvaco-Escanaba paper mill. Sufficient funds from the sale of this mill were deposited with the Trustee (Citibank, N.A.) in April 2005 to provide for the defeasance of these bonds in accordance with Article XII of the Indenture. The Trustee has been directed to call the bonds for optional redemption on April 15, 2012. The Trustee holds noncallable government obligations that have been certified to provide sufficient moneys to pay the redemption price of the bonds on the redemption date and has released and discharged MWV's obligations under the Indenture. Although these bonds are now rated 4 notches above MWV's senior unsecured debt, Moody's believes that the defeasance documentation does not provide sufficient assurances to rate the bonds more highly. Upgrades: Delta (County of) MI, Economic Development Corporation US$ 93.5 million 6.25% Senior Unsecured Revenue Bonds 04/15/2027 upgraded to A3 from Ba1; Cornell (Town of) MI, Economic Development Corporation US$ 25.09 million 5.875% Senior Unsecured Revenue Bonds 05/01/2018 upgraded to A3 from Ba1; Delta (County of) MI, Economic Development Corporation US$ 6.7 million 6.45% Senior Unsecured Revenue Bonds 04/15/2023 upgraded to A3 from Ba1. The stable outlook reflects MWV's stable margins and credit protection metrics that are expected to remain consistent with the current rating, such as EBITDA margins above 12%. Moody's last rating action on MWV was on May 15, 2008 when Moody's downgraded MWV's senior unsecured debt ratings to Ba1 from Baa3, concluding a review for possible downgrade initiated on April 8, 2008. Headquartered in Richmond, Virginia, MWV is a global packaging company that delivers products to companies in the food and beverage, media and entertainment, personal care, home and garden, cosmetic and healthcare industries. The company also operates a consumer and office products business, a specialty chemicals business and a land management business. Operations are located in more than 30 countries. MERITAGE HOMES: Lenders Reduce Borrowing Capacity by $300 Million ----------------------------------------------------------------- Meritage Homes Corp. entered into a Fourth Amendment to its First Amended and Restated Credit Agreement with Guaranty Bank, as administrative agent and swing line lender, and various other financial institutions. The Fourth Amendment decreased the borrowing capacity to $500 million from $800 million and increased the applicable interest rate by up to 100 basis points and the unused commitment fee by 10 basis points, depending on the company's leverage ratio. In addition, the Fourth Amendment: -- eliminated the individual quarterly interest coverage test. -- modified the interest coverage ratio: The company shall not permit the interest coverage ratio to be less than: * 0.50 to 1.00 at the end of any fiscal quarter during the period from and including June 30, 2008 through and including June 30, 2009, * 1.00 to 1.00 at the end of fiscal quarters Sept. 30, 2009 and Dec. 31, 2009; * 1.25 to 1.00 at the end of fiscal quarter March 31, 2010; * 1.50 to 1.00 at the end of fiscal quarter June 30, 2010; * 1.75 to 1.00 at the end of fiscal quarter September 30, 2010; or * 2.00 to 1.00 at the end of any fiscal quarter therafter. -- modified the covenant requirements to allow for alternative compliance with any of the interest coverage ratio, the "Adjusted Cash Flow Ratio" or a minimum liquidity requirement. -- lowered the minimum tangible net worth requirement base to $500 million and modified the covenant to allow for exclusion of the cumulative amount of any deferred tax valuation allowance (not to exceed $150 million) from the calculation of tangible net worth. -- amended the definition of the leverage ratio to reduce the indebtedness component for unrestricted cash in excess of $25 million (up to a maximum of $300 million). -- modified the leverage ratio requirement: The company shall not permit the leverage ratio to be greater than: * 2.15 to 1.00, if the interest coverage ratio is greater than or equal to 2.00 to 1.00; * 1.75 to 1.00, if the interest coverage ratio is less than 2.00 to 1.00, but greater than or equal to 1.00 to 1.00; or * 1.50 to 1.00, if the interest coverage ratio is less than 1.00 to 1.00. -- reduced the borrowing base advance rates by 5% to 15% for the various components and reduced the maximum amounts of certain types of real estate inventory that may be owned at any given time. -- added a commitment reduction provision that requires the facility size to be reduced dollar for dollar by the amount that shareholders' equity falls below $500 million (subject to a maximum commitment reduction of $100 million). Consenting lenders party to the Fourth Amendment received a fee in connection therewith. A copy of the Fourth Amended and Restated Credit Agreement is available for free at http://ResearchArchives.com/t/s?302c About Meritage Homes Headquartered in Scottsdale, Arizona, Meritage Homes Corporation (NYSE: MTH) -- http://www.meritagehomes.com/-- builds primarily single-family homes across the southern and western United States under the Meritage, Monterey and Legacy brands. Meritage has active communities in Houston, Dallas/Ft. Worth, Austin, San Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, the California East Bay/Central Valley and Inland Empire, Denver and Orlando. Meritage Homes is the 12th largest homebuilder in 2006, Builder Magazine says. It is the only publicly held home builder based in Arizona. Meritage had 10,487 U.S. home closings generating $3,461,000 in revenues, according to data compiled by Builder. Meritage Homes has reported four consecutive quarterly net losses beginning in the second quarter ended June 30, 2007. At March 31, 2008, the company's consolidated balance sheet showed $1.6 billion in total assets, $894.8 million in total liabilities, and $686.8 million in total stockholders' equity. * * * As disclosed in the Troubled Company Reporter on June 16, 2008, Fitch Ratings has downgraded Meritage Homes Corporation's Issuer Default Rating and other outstanding debt ratings as: IDR to 'B+' from 'BB-'; and Senior subordinated debt to 'B-/RR6' from 'B'. Fitch has also affirmed Meritage Homes' senior unsecured debt at 'BB-' and assigned a Recovery Rating of 'RR3'. The Rating Outlook remains Negative. MERVYNS LLC: Files for Chapter 11 Bankr. Protection in Delaware --------------------------------------------------------------- Mervyns LLC and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code before the U.S. Bankruptcy Court for the District of Delaware to restructure the company's debt and re-align its business operations. Mervyn's LLC, which operates the Mervyns business, together with Mervyn's Holdings LLC, parent of Mervyn's LLC, and Mervyn's Brands LLC, subsidiary of Mervyn's LLC, filed for bankruptcy. The main case has been assigned case number 08-11586. The company intends to work with its constituencies to execute its reorganization through Chapter 11. Mervyns stores will remain open and business will continue as the company moves through the bankruptcy process. The Wall Street Journal reported that Mervyns LLC was the latest victim of the challenged retail environment. In a press statement, John Goodman, chief executive officer of Mervyns, said: "Mervyns needs to reorganize its finances and operations due to the state of the economy and difficult operating environment for our industry. After careful consideration of available alternatives, the company's management board determined that a Chapter 11 filing was a necessary and prudent step that allows us to operate our business without interruption as we seek to restructure our debt and other obligations in a controlled, court-supervised environment. We are committed to serving our customers and maintaining regular operations as we undertake this reorganization." Mervyn's joins a group of retailers that have gone under recently: 1. Steve & Barry's LLC; 2. Linen "n Things Inc; 3. Lillian Vernon Corp.; and 4. Sharper Image Corp. According to the Journal, Mervyns's filing was expected, as a growing number of vendors were delaying shipments to the company's stores and key lenders that provide finance and credit to apparel makers stopped approving orders in recent weeks. In conjunction with the filing, the company has received a commitment for a $465 million debtor-in-possession facility from a lender group led by Wachovia Capital Finance Corporation as agent. Upon Bankruptcy Court approval, the financing, combined with operating cash flow, will be used to fund the company's ongoing operations. Mervyns will seek the Bankruptcy Court's approval for additional authorizations, including permission to continue paying employee wages and salaries and to provide employee benefits without interruption, among others. During the Chapter 11 process, vendors must expect to be paid for post-petition purchases of goods and services in the ordinary course of business. The company has also asked for Bankruptcy Court permission to continue to honor its current customer policies regarding merchandise returns and outstanding gift cards and customer loyalty programs, so that the Chapter 11 process will not impact the company's customers. "The decisive action we are taking provides the company with the most effective means to restructure our operations, strengthen our balance sheet and position Mervyns to compete more effectively," Mr. Goodman continued. "I want to thank our customers and vendors for their continued support during this process. We are pleased that, as we seek to restructure, we can continue to satisfy our customers' expectations by offering style, quality and excellent service - all at great prices. In addition, we are grateful to all of our associates for their hard work, loyalty and dedication. Our management team is committed to making this financial restructuring successful and leading Mervyns toward a bright future." About Mervyns LLC Mervyns LLC -- http://www.mervyns.com/-- operates more than 177 stores in seven states, providing a mix of top national brands and exclusive private labels. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. Cerberus Capital Management and Sun Capital Partners, along with three other partners -- including real-estate investor Lubert- Adler -- bought Mervyn's from Target Corp. in 2004 for $1,200,000,000. Cerberus, et al., put up about $400,000,000 in equity and financed the rest. Kurtzman Carson Consultants LLC is the information agent of the Debtor. METROMEDIA COMPANY: Affiliates File Chapter 7 Liquidation --------------------------------------------------------- Affiliates of Metromedia Restaurant Group filed on Tuesday, July 29, 2008, for chapter 7 liquidation with the U.S. Bankruptcy Court for the Eastern District of Texas, various reports say. According to Orlando Business Journal, the bankruptcy petition did not mention Metromedia Restaurant Group as debtor, but listed Steak and Ale of Florida Inc., S&A Restaurant Corp., and S&A Properties Corp. as among the Debtors. Metromedia Group spokesperson, Leah Templeton, stated that Ponderosa and Bonanza restaurants operating under Metromedia Steakhouses Co. LP are not affected by the filing, Business Journal relates. Bennigan's Franchising Co., which owns the Bennigan's and Steak & Ale trademarks and franchise agreements in the domestic and international arena, disclosed that it wasn't part of the bankruptcy filing, Reuters writes. Bennigan's Franchising added that its 138 Bennigan's branches "remain open and fully operational," Reuters notes. The Plano (Texas) Courier Star discloses that some 38 affiliates were named as co-debtors in the filing, but not the franchisees. However, about 200 Bennigan's and Steak & Ale stores were shut down affecting at least 9,200 workers, The Wall Street Journal relates. Based on Bloomberg News, the Debtors disclosed assets of $778.9 million and debts of $324.2 million. Default and Likely Bankruptcy The Troubled Company Reporter said on June 5, 2008, that billionaire John Werner Kluge, who owns Metromedia Restaurant Group and Metromedia Company, was in negotiations with major lender, GE Capital Solutions, to prevent a bankruptcy filing. GE Capital Solutions is a unit of GE Commercial Finance. Early this year, Metromedia Company failed to meet some of its obligations under a loan deal with GE. As a result, GE declared Metromedia in default and demanded immediate payment of the debt. The TCR reported last month that Metromedia, though hopeful to "find a last-minute workout plan," has been mulling a bankruptcy filing. Months earlier, the company engaged Jeff Reisner, Esq., as its bankruptcy counsel. About Metromedia John Werner Kluge is a German-American entrepreneur and a billionaire. He is best known as a television industry mogul in the United States. Mr. Kluge's major move into media was by purchasing stock in the Metropolitan Broadcasting Company in the mid-1950s. Mr. Kluge is chairman, CEO and president of holding company, Metromedia. East Rutherford, New Jersey-based Metromedia Restaurant Group -- http://www.metromediarestaurants.com/-- is part of Metromedia Company -- a multi-concept, table-service restaurant group. -- is a multi-concept table-service restaurant group, with more than 800 Bennigan's(R), Bennigan's SPORT(TM), Steak and Ale(R), Ponderosa Steakhouse(R) and Bonanza(TM) Steakhouse restaurants in the U.S. and abroad. Its restaurants, representing four of the most well- known brands in the restaurant industry, serve more than 160 million guests a year. The company operates nearly 1,000 restaurants in the United States and abroad, which are comprised of Bennigan's, Steak and Ale, Ponderosa Steakhouse and Bonanza Steakhouse. Bennigan's restaurants are based on the taverns of Ireland and were founded in 1976. Steak and Ale restaurants are inspired by old-fashioned English country inns and were founded in 1966. Ponderosa Steakhouse and Bonanza Steakhouse operate together as one large restaurant concept. The company franchises its Bennigan's, Ponderosa Steakhouse and Bonanza Steakhouse restaurants. MOSAIC CO: Moody's Ups Senior Unsecured Ratings to Baa3 from Ba1 ---------------------------------------------------------------- Moody's upgraded The Mosaic Company's senior unsecured rating to Baa3 from Ba1. The decision to raise the rating reflects both management's ability to realize its often stated public goal of materially reducing debt along with the enhanced strength of Mosaic's cash flow caused by extremely robust pricing conditions in Mosaic's fertilizer markets. Management's ability, and willingness, to reduce debt such that the company attains sustainable investment grade credit metrics is a key factor in the upgrade. Indeed, as the fertilizer industry approaches peak cyclical conditions in terms of pricing, Mosaic's current credit metrics have, and will likely for the intermediate term, exceed levels that support a Baa investment grade rating. Mosaic's CFR and LGD assessments are withdrawn. This concludes the review of Mosaic that was initiated on June 27, 2008. The outlook for the ratings is positive. Moody's review of Mosaic focused on the sustainability of improved margins and debt protection measures as well as the likely permanence of the capital structure expected to be maintained in what will continue to be a cyclical business. In addition, the review also considered both the ongoing material weakness in reporting, (which Moody's expects to be positively resolved in the near term), and the secured nature of its bank credit facility, which can act as limiting factors in assessing the level of an investment grade rating. An additional consideration in the upgrade was the company's intent to amend, restate or replace its secured bank facility with an unsecured credit facility over the next nine months. Since its formation Mosaic's management has indicated many times in public forums, including its most recent annual report, its goal of reducing debt and moving toward investment grade status. Concrete steps toward this goal were made over the last 24 months. >From May 1, 2007 to December 31, 2007, Mosaic repaid approximately $1.0 billion in long-term debt, which included $776.0 million of repayment of long-term debt during the fiscal year ending May 31, 2008. At the end of February 2008 balance sheet debt totaled $1.6 billion down from $2.4 billion at the end of May 2007. Mosaic's robust cash flows generated from its ongoing business enabled them to follow through on its verbal pledges to not only pay down their long-term debt but also add to cash balances which total $1.1 billion at the end of February 2008. Moody's views these payments of long-term debt to have completed Mosaic's plan to reduce outstanding borrowings, strengthen its balance sheet, and continue on a path to improving credit metrics to levels that strongly support consideration of investment grade credit ratings. The positive outlook reflects Moody's belief that management will stay committed to their goal of having credit metrics solidly in the investment grade category on a sustainable basis, similar to its key investment grade competitors. Moody's also expects that Mosaic will continue to benefit from the healthy operating environment and robust pricing for fertilizer products and that this will serve to improve Mosaic's operating margins and cash flow metrics. These conclusions are founded on the currently high crop prices, which encourage spending on crop nutrients, especially in light of global expansion and associated grain demand for food needs. In the event that Mosaic continues to hold credit metrics at investment grade levels on a sustainable basis Moody's would consider revising the rating or outlook. Prior to a positive move of one notch, we would also look for the crop nutrient market dynamics to remain healthy, for the remaining material control weakness to be resolved, and would expect that the need to provide security on its credit facilities be eliminated. Rating actions: ..Issuer: The Mosaic Company ....Corporate Family Rating, Ba1 rating withdrawn ....Probability of Default Rating, Ba1 rating withdrawn ....Senior Secured Guaranteed Bank Credit Facility, Baa2 -- affirmed ....Senior Unsecured Guaranteed Regular Bond/Debenture, Upgraded to Baa3 from Ba1 ..Issuer: Mosaic Global Holdings Inc. ....Senior Unsecured Guaranteed Regular Bond/Debenture, Upgraded to Baa3 from Ba1 ....Senior Unsecured Regular Bond/Debenture, Upgraded to Baa3 from Ba2 The Mosaic Company, headquartered in Plymouth, Minnesota, is a leading global producer of phosphate and potash fertilizers and animal feed ingredients. Mosaic generated annual revenues of about $8.0 billion for the LTM period ending February 29, 2008. MPI CENTER: Case Summary and Two Largest Unsecured Creditors ------------------------------------------------------------ Debtor: MPI Center, LLC 1317 Ridgewood Drive Starkville, MS 39759 Bankruptcy Case No.: 08-12910 Related Information: Michael R. Smith, managing member, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 25, 2008 Court: Northern District of Mississippi (Aberdeen) Debtor's Counsel: Craig M. Geno, Esq. Harris Jernigan & Geno, PLLC P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (601) 427-0048 (cmgeno@harrisgeno.com) Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million List of Largest Unsecured Creditors: Creditor Claim Amount -------- ------------ Carl F. Allen $20,000 Property Tax Associates 11,447 MRS. FIELDS: Board Names J. Lauck and M. Ward as Interim Co-CEOs ---------------------------------------------------------------- The Board of Directors of Mrs. Fields Famous Brands, LLC, appointed John Lauck, 52, and Michael R. Ward, 50, as interim co- Chief Executive Officers to fill the role vacated by Stephen Russo, MFFB's former Chief Executive Officer. In his new role, Mr. Lauck will be primarily responsible for the day-to-day operations of the TCBY organization and the Mrs. Fields organization (other than those for which Mr. Ward has already had responsibility) and Mr. Lauck will continue to serve as the President of the Mrs. Fields organization. In his new role, Mr. Ward will take on the added duties of overseeing financial and accounting matters as well as MFFB's previously announced restructuring and he will continue to serve as Executive Vice President, Chief Legal Officer and Secretary of MFFB and retain responsibility for areas over which he already had responsibility. Mr. Lauck and Mr. Ward have not entered into additional arrangements with MFFB, nor will they receive any additional compensation, in conjunction with their new roles. Mr. Lauck has been President of the Mrs. Fields Division of MFFB since January 2007. From February 2006 to January 2007, he was Chief Marketing Officer of MFFB and served as Executive Vice President of Marketing of MFFB from April 2004 to January 2007. >From September 2001 to April 2004, Mr. Lauck served as President and Chief Marketing Officer for Arby's Franchise Association. Prior to joining Arby's, Mr. Lauck was on a one-year sabbatical. >From February 2000 to July 2001 Mr. Lauck was Senior Vice President and Chief Marketing Officer for Groceryworks.com, a home grocery delivery start-up. Between November 1998 and January 2000 Mr. Lauck was the Senior Vice President and Chief Marketing Officer for Footaction and from November 1997 to November 1998 was the Vice President of Corporate Development for Blockbuster Video. Prior to Blockbuster, Mr. Lauck served in various marketing positions at Pizza Hut and General Mills. Mr. Ward has been Chief Legal Officer of MFFB since February 2006 and Executive Vice President, General Counsel and Secretary of MFFB and its parent companies, Mrs. Fields Original Cookies, Inc., Mrs. Fields Holding Company, Inc. and Mrs. Fields Companies, Inc. since June 2004. Since December 2004, Mr. Ward has been a Director of MFOC. From March 2004 to June 2004, Mr. Ward was Senior Vice President, General Counsel and Secretary of MFFB. Mr. Ward was Senior Vice President, General Counsel and Secretary of MFOC from June 2000 to June 2004 and of MFC from its inception in September 2001 to June 2004. Mr. Ward was Vice President of Administration and the Legal Department of MFOC from September 1996 to May 2000 and Secretary of MFOC since April 1999. Between 1991 and 1996, Mr. Ward's responsibilities were overseeing the Legal Department and Human Resources Department for Mrs. Fields, Inc., a predecessor to MFOC. Mr. Ward currently serves as a member of the Board of Directors of Prime Alliance Bank. Mr. Ward is admitted to practice law in the State of Utah. About Mrs. Fields Famous Brands Mrs. Fields Famous Brands LLC -- http://www.mrsfields.com/-- is a well established franchisor in the premium snack food industry, featuring Mrs. Fields(R) and TCBY(R) as the company's core brands. As of March 29, 2008, the company's franchise systems operated through a network of 1,278 retail concept locations throughout the United States and in 21 foreign countries. As reported in the Troubled Company Reporter on May 20, 2008, Mrs. Fields Famous Brands LLC's consolidated balance sheet at March 29, 2008, showed $147.2 million in total assets and $247.2 million in total liabilities, resulting in a $100.0 million member's deficit. Going Concern Doubt As reported in the Troubled Company Reporter on April 18, 2008, KPMG LLP, in Salt Lake City, expressed substantial doubt about Mrs. Fields Famous Brands LLC's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 29, 2007. The auditing firm pointed to the company's recurring net losses, negative cash flows from, and net member's deficit at Dec. 29, 2007. NEW CENTURY ENERGY: Files for Chapter 11 Bankruptcy in Texas ------------------------------------------------------------ New Century Energy Corp., and two of its affiliates, Gulf Coast Oil Corporation and Century Resources, Inc., filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code, in the U.S. Bankruptcy Court for the Southern District of Texas, in order to facilitate their financial restructuring. No receiver, fiscal agent or similar officer has been appointed for the Company. On July 21, 2008, LV Administrative Services, Inc., administrative and collateral agent for Laurus Master Fund, Ltd., notify the company of its acceleration of the amounts due to Laurus under: a) a $15,000,000 secured convertible term note entered into on June 30, 2005, which had an outstanding balance of $12,000,000 excluding any accrued and unpaid interest as of March 31, 2008, as amended; and b) a $9,500,000 secured term note entered into on Sept. 19, 2005, which had a balance of at least $6,351,391 as of March 31, 2008, as amended. The notes matured on June 30, 2008, and have not been paid at present. According to the company's regulatory filing with the Securities and Exchange Commission, the acceleration notice also notified the company of Laurus's acceleration of and request for immediate payment of the entire amount of funds the company owe to Laurus, including any and all accrued and unpaid interest, default interest and default payments due on such amount. Laurus had previously provided the company a payment default notice and short-term forbearance agreement dated July 7, 2008, wherein Laurus had agreed to forebear from enforcing its rights under the outstanding liabilities we owe to Laurus under the convertible note, term note and other outstanding notes the company have with Laurus until July 18, 2008, as the company sough other alternative financing to repay Laurus; however, the company was not able to raise any additional funding to restructure the its obligations and the forbearance period expired after July 18, 2008. The company is presently in talks with Laurus regarding the further extension of the payment of the Laurus debt and a potential reorganization of the company's assets and debts, which may or may not include the company filing for bankruptcy protection, Laurus foreclosing on the assets, which Laurus alleges it can do without further notice to the company, executing a deed in lieu of foreclosure, or entering into a Texas non-judicial foreclosure. The Laurus debts, evidenced by five separate notes totaling $68,000,000, which amount does not include any default interest and default payments due in connection with such Laurus Debt, which default payments may total an additional 30% of the amount owed to Laurus. The company do not have sufficient funds to repay the Laurus Debts and any default payments. To date, the talks with Laurus regarding the extension of the payment of the debt have not been successful and although discussions with Laurus are ongoing, there can be no assurance that a favorable outcome for the company will be reached. If it is unable to stay the payment of the Laurus Debt and prevent Laurus from foreclosing on its assets, the company could be compelled to abandon its current business activities, sell a substantial portion of its assets to Laurus. As a result, the company's common stock would become devalued, current shareholders may be substantially diluted and cease to be a public filer, cease to have a market for its securities, and any of its securities could become worthless. As reported in the Troubled Company Reporter on May 30, 2008, the company's consolidated balance sheet at March 31, 2008, showed $51,901,717 in total assets and $75,326,678 in total liabilities, resulting in a $23,424,961 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $10,339,496 in total current assets available to pay $32,379,636 in total current liabilities. The company reported a net loss of $562,701, on total revenues of $5,954,762, for the first quarter ended March 31, 2008, compared with a net loss of $2,156,065, on total revenues of $2,976,617, in the same period last year. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2cdf Going Concern Disclaimer PMB Helin Donovan, LLP, in Houston, expressed substantial doubt about the company's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring operating losses, accumulated deficit and working capital deficit at Dec. 31, 2007. On July 22, 2008, the company employed Malone & Bailey, PC, as accountant, replacing PMB Helin. The company has not been audited for three months ended March 31, 2008 and 2007. About New Century Energy Headquartered in Houston, Texas, New Century Energy Corp. (OTCBB:NCEY) -- http://www.newcenturyenergy.com/-- is an independent oil and gas exploration and production company. The company operates primarily in Matagorda, McMullen, Goliad and Wharton Counties in Texas. NORMAN MONROE: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Norman Monroe Whittington, Sr. 3999 Whispering Meadow Drive Randallstown, MD 21133 Bankruptcy Case No.: 08-19582 Chapter 11 Petition Date: July 25, 2008 Court: District of Maryland (Baltimore) Judge: James F. Schneider Debtors' Counsel: Marc Robert Kivitz, Esq. (mkivitz@aol.com) 201 N. Charles Street, Suite 1330 Baltimore, MD 21201 Tel: (410) 625-2300 Fax: (410) 576-0140 Total Assets: $2,269,450 Total Debts: $1,239,689 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb08-19582.pdf NORTHERN BAY: Sec. 341(a) Meeting Set for July 31 ------------------------------------------------- The United States Trustee for Region 11 will convene a meeting of Northern Bay, LLC's creditors at 9:00 a.m., on July 31, 2008, at the U.S. Trustee's Office, 780 Regent Street, Suite 307, Madison, Wis. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Arkdale, Wisconsin, Northern Bay, LLC -- http://www.northernbayresort.com/-- owns and operates a golf course and lakewide condominiums. The company filed for Chapter 11 bankruptcy protection on June 30, 2008 (W.D. Wis. Case No. 08- 13400). Denis P. Bartell, Esq. represents the Debtor as counsel. When the company filed for protection from its creditors, it listed estimated assets of between $50 million and $100 million and estimated debts of between $10 million and $50 million. ONE COMMUNICATIONS: S&P Cuts Rating to B- from B on Credit Cushion ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Waltham, Massachusetts-based competitive local exchange carrier One Communications Corp. to 'B-' from 'B'. "The downgrade reflects limited covenant cushion under the company's bank credit facility, particularly the total leverage covenant," said Standard & Poor's credit analyst Allyn Arden. The total leverage covenant steps down to 3.25x at the end of the third quarter of 2008. "Establishing adequate protection under the covenants may be challenging given current performance," said Mr. Arden, "and the company will likely need to utilize its cash balance to pay down debt to maintain compliance." The outlook is developing, meaning that we could raise or lower the ratings. Total debt outstanding as of March 31, 2008, was approximately $580 million. At the same time, Standard & Poor's lowered its issue-level ratings on One Communications' senior secured term loan and revolver to 'CCC+' from 'B-'. The recovery rating remains unchanged at '5', indicating expectations for modest (10% to 30%) recovery in the event of payment default. ORIGIN AGRITECH: Inks Notes Repurchase Deal with Citadel Equity --------------------------------------------------------------- Origin Agritech Limited entered into a Notes Repurchase Agreement with Citadel Equity Fund Ltd. providing for the repurchase by the company from Citadel of a portion of the company's outstanding 1% Guaranteed Senior Secured Convertible Notes due 2012. The company issued the Notes to Citadel in an aggregate principal amount of $40 million. Pursuant to the agreement, the company will repurchase from Citadel the Notes in an aggregate principal amount of $18.7 million for a total repurchase price of $20.0 million payable in cash. The Note repurchase will be completed in two tranches. The company expects to purchase $14.0 million of the Notes on July 28, 2008, and $4.7 million of the Notes by the end of 2008. Upon the completion of the repurchases, the repurchased Notes will be cancelled. The company intends to finance the repurchase of the Notes from its cash resources. As a result of lower interest expense, the company expects the repurchase to be accretive to net earnings by approximately $0.01 per diluted share in fiscal 2008 and $0.06 per diluted share in fiscal 2009, on a U.S. GAAP basis. In connection with the Notes repurchase, Citadel has agreed to waive past noncompliance by the company through June 30, 2008, under certain financial covenants, and to amend a covenant, contained in the indenture for the Notes. Citadel has not agreed to waive any future defaults under the Note indenture. This Note repurchase provides the company with the opportunity to increase equity shareholder value while continuing to streamline its operations and fund its GMO development through internally generated resources. A full-text copy of the Notes Repurchase agreement is available for free at http://ResearchArchives.com/t/s?3021 About Origin Agritech Limited Headquartered in Beijing, China, Origin Agritech Limited -- http://www.originagritech.com/-- is an agricultural technology company specializing in agri-biotech research, development and production to supply the growing populations of China. Founded in 1997, Origin develops, grows, processes, and markets crop seeds to farmers throughout China and parts of Southeast Asia via a network of approximately 3,800 first-level distributors and 65,000 second- level distributors and retailers. PALM TERRACES: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtor: Palm Terraces Development Partners I, LTD 1928 Thatch Palm Drive Boca Raton, FL 33432 Case Number: 08-20343 Involuntary Petition Date: July 25, 2008 Court: Southern District of Florida (West Palm Beach) Judge: Paul G Hyman, Jr. Petitioner's Counsel: Jeffrey N. Schatzman, Esq. (notices@schatzmanlaw.com) Schatzman & Schatzman, P.A. 9990 SW 77 Avenue, Phase 2 Miami, FL 33156 Tel: (305) 670-6000 Fax : 305-274-0220 Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Epic Interiors, Inc. work performed $17,077 c/o Jeffrey Schatzman 9990 SW 77 Ave PH-2 Miami, FL 33156 PEREGRINE PHARMA: Receives Nasdaq Bid Price Non-Compliance Notice ----------------------------------------------------------------- Peregrine Pharmaceuticals Inc. received a Staff Determination letter from the Nasdaq Stock Market, indicating that the company is not in compliance with the $1.00 minimum bid price requirement for continued listing set forth in NASDAQ Marketplace Rule 4310(c)(4). As a result, the company's common stock would be subject to delisting from the NASDAQ Capital Market unless Peregrine requests a hearing before the NASDAQ Listing Qualifications Panel. Peregrine intends to request a hearing before the Panel, which will stay the delisting of the company's securities pending the Panel's decision. Rule 4805(a) provides that all hearings shall be scheduled, to the extent practicable, within 45 days of the date that the request for hearing is filed. At the hearing, Peregrine intends to request continued listing on the NASDAQ Capital Market based upon its plan for regaining compliance with the minimum bid price requirement. Pursuant to NASDAQ Marketplace Rule 4802(b), the Panel has the authority to grant Peregrine up to an additional 180 days or until Jan. 19, 2009, to implement its plan of compliance, which could include a reverse stock split if the price has not exceeded $1.00 per share for 10 consecutive business days by that time. The NASDAQ Staff Determination letter states that historically, Panels have generally viewed a reverse stock split implemented within 30 to 60 days as the only definitive plan acceptable to resolve a bid price deficiency, but that recently the authority of Panels to grant additional time to companies was modified so that a Panel could allow up to 180 calendar days from the date of the Staff Determination letter, if the Panel deems it appropriate. The letter notes that the company may wish to consider presenting a plan that includes a discussion of the events that it believes will enable it to regain compliance in this time frame and a commitment to effect a reverse stock split, if necessary. However, there can be no assurance that the Panel will grant Peregrine's request for continued listing on the NASDAQ Capital Market. On July 25, 2007, Peregrine received a letter from NASDAQ advising that the bid price of the company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the NASDAQ Capital Market as set forth in NASDAQ Marketplace Rule 4310(c)(4) for the previous 30 consecutive business days. In accordance with NASDAQ Marketplace Rule 4310(c)(4), the company was provided 180 calendar days and granted an additional 180-day- extension period, or until July 21, 2008, to regain compliance with the minimum bid price requirement. About Peregrine Pharmaceuticals Headquartered in Tustin, California, Peregrine Pharmaceuticals Inc. (NASDAQ:PPHM) -- http://www.peregrineinc.com/-- is a clinical-stage biopharmaceutical company developing monoclonal antibodies for the treatment of cancer and hepatitis C virus infection. The company is advancing three separate clinical programs with its compounds bavituximab and Cotara that employ its two platform technologies: Anti-Phosphatidylserine therapeutics and Tumor Necrosis Therapy. PRIMEDIA INC: Sells Website, Auto Guide Publications ---------------------------------------------------- PRIMEDIA Inc. sold its South Florida and Wisconsin Auto Guide publications as well as the website http://www.autoguide.comto Target Media Partners, a leading independent print and online publisher of classified and used vehicle photo advertising. In addition, the company closed its Atlanta Auto Guide. The company had previously announced its intention to exit the Auto Guide business by the end of the second quarter of 2008. Headquartered in Atlanta, PRIMEDIA Inc.(NYSE: PRM) -- http://www.primedia.com/-- through its Consumer Source Inc. operation, is an integrated media business that provides advertising supported print and online consumer guides for the apartment and new home industries. Consumer Source publishes and distributes more than 38 million guides -- such as Apartment Guide and New Home Guide -- to approximately 60,000 U.S. locations each year through its proprietary distribution network, DistribuTech. The company also distributes category-specific content on its leading websites, including ApartmentGuide.com, NewHomeGuide.com and Rentals.com, a comprehensive single unit real estate rental site. At March 31, 2008, the company's consolidated balance sheet showed $251.3 million in total assets and $388.1 million in total liabilities, resulting in a $136.8 million total stockholders' deficit. PRINTERS ROW: Section 341(a) Meeting Set for August 26 ------------------------------------------------------ The United States Trustee for Region 11 will convene a meeting of Printers Row, LLC's creditors at 1:30 p.m., on Aug. 26, 2008, at 219 South Dearborn, Room 802, Chicago, Ill. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Chicago, Illinois, Printers Row LLC owns and operates Hotel Blake. The company filed for Chapter 11 protection on July 3, 2008 (Bankr. N.D. Ill. Case No. 08-17301). Morgan M. Smith, Esq., at Schwartz Cooper Chartered, represents the Debtor in its restructuring efforts. When the Debtor filed for protection against it creditors, it listed assets and debts between $50 million to $100 million. PROGRESSIVE MOLDED: Creditors' Committee Taps Arent Fox as Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors for Progressive Molded Products Inc. and its debtor-affiliates seeks the U.S. Bankruptcy Court for the District of Delaware's authority to retain Arent Fox LLP as counsel, nunc pro tunc to July 7, 2008. As the Committee's counsel, Arent Fox will, among other things: (a) assist, advise and represent the Committee in its consultation with the Debtors relative to the administration of their Chapter 11 cases; (b) assist, advise and represent the Committee in analyzing the Debtors' assets and liabilities, investigate the extent and validity of liens and participate in and review any proposed asset sales or dispositions; (c) attend meetings and negotiate with the representatives of the Debtors; (d) assist the Committee in the review, analysis and negotiation of any plan of reorganization and any negotiation of the disclosure statement; (e) assist the Committee in the review, analysis, and negotiation of any financing or funding agreements; (f) take all necessary action to protect and preserve the interests of the Committee, including, without limitation, the prosecution of actions on its behalf, negotiations concerning all litigation in which the Debtors are involved, and review and analysis of all claims filed against the Debtors' estate; (g) prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; and (h) perform all other necessary legal services in these cases. Arent Fox will be compensated in accordance with the firm's customary rates: Professional Rate/Hour ------------ --------- Partners $455-$790 Of Counsel $455-$750 Associates $290-$515 Paraprofessionals $145-$260 Arent Fox intends to apply for allowance of compensation and reimbursement of expenses in accordance with the applicable provisions of the Bankruptcy Code. Andrew I. Silfen, partner and chair of Financial Restructuring Group at Arent Fox LLP, assured the Court that his firm is a disinterested party as the term is defined in Section 101(14) of the Bankruptcy Code, and have no interest adverse to the Committee, the Debtors and their creditors. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: US Debtors Consents to Liquidation Proposal --------------------------------------------------------------- Progressive Molded Products, Inc., and Progressive Marketing, Inc. consent to the U.S. Trustee for Region 3's request for conversion of their bankruptcy cases to liquidation proceedings under Chapter 7 of the Bankruptcy Code. However, two Debtors who primarily perform business in Canada -- THL-PMPL Holding Corp., and Progressive Moulded Products Limited -- oppose the conversion, and instead propose the dismissal of their Chapter 11 cases for "cause". Due to the decision of their primary customers -- General Motors Corp., Ford Motor Company and Chrysler LLC -- to move their businesses to other suppliers, the Debtors have pursued an orderly wind-down of their operations. The Debtors aver that an efficient wind-down of their estates is necessary in order to minimize administrative expenses associated with the liquidation process. They, however, assert that a liquidation of the U.S. Debtors' estates with the oversight of a Chapter 7 trustee, and a liquidation of the Canadian Debtors' estate supervised only by the Canadian Court will decrease their estates' administrative expenses. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, avers that the dismissal of the Canadian Debtors' Chapter 11 cases will put an end to the costly and unnecessary flurry of blunderbuss, expedited discovery efforts and litigation tactics recently launched by the Official Committee of Unsecured Creditors. On July 21, 2008, the Debtors' counsel received an extensive request for expedited discovery from the Committee. The Debtors, however, assert that under the circumstances, it is not in the best interests of their estates and creditors to accede to the request for broad-ranging, expedited discovery because, among other things, any investigation is left best to (i) the Chapter 7 trustee who will be appointed to oversee the U.S. Debtors' cases before the U.S. Bankruptcy Court for the District of Delaware, and (ii) the Monitor, which has and will continue to supervise all four of the Debtors in proceedings before the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act. Ms. Morgan asserts that the dismissal of the Canadian Debtors' Chapter 11 cases will significantly reduce the administrative expenses to be incurred during the wind-down of their operations due to the elimination of costs of the U.S. professionals' fees, including those of the U.S. counsel to the Canadian Debtors and the Committee, along with the Committee's financial advisor. In addition, dismissal of the Canadian Debtors' Chapter 11 cases will put an end to the Committee's litigation tactics as the investigation of the Debtors would be conducted by a Chapter 7 trustee, along with the Monitor in the CCAA Proceeding, Ms. Morgan contends. Ms. Morgan adds that in a dismissal, the Canadian Debtors will no longer incur significant procedural administrative expenses, like costs related to service and noticing that arise in connection with the requirement to seek identical relief in both the Canadian Court and the Bankruptcy Court. The Canadian Debtors, she notes, will only incur the administrative expenses required under the CCAA to liquidate their estates. Ms. Morgan says that the dismissal of the Canadian Debtors' Chapter 11 cases will aid judicial efficiency. She contends the Canadian Court is the appropriate forum for the Canadian Debtors given that their assets and operations are primarily in Canada. Among other examples, 10 of the 12 plants operated by the Debtors are run by PMPL in Canada, and 82% of the Debtors' sales revenues were generated from parts produced by PMPL in Canada. Moreover, Ms. Morgan notes that (i) the process of liquidation under the CCAA is substantially identical to a liquidation under the Bankruptcy Code, and (ii) no unusual circumstances exist that militate against the dismissal of the Canadian Debtors' Chapter 11 cases. The U.S. Debtors believe that conversion of their Chapter 11 cases will preserve the rights that interested parties may assert with respect to their estates. While the Debtors believe that majority of the issues arising in the liquidation will likely involve only the Canadian Debtors, they accede that certain discrete matters will affect the U.S. Debtors. Thus, the continuing jurisdiction of the Bankruptcy Court over the U.S. Debtors in Chapter 7, together with the oversight of a Chapter 7 trustee, will facilitate an efficient wind-down of their estates, Ms. Morgan asserts. The Debtors' Cross-Motion will be heard on July 30, 2008, the objections were due July 28. The Bankruptcy Court approved a hearing on shortened notice for the Debtors' request. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. -- designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. PROGRESSIVE MOLDED: Wants Filing of Schedules Extended to Sept. 5 ----------------------------------------------------------------- Progressive Molded Products Inc. its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the deadline to file their Schedules of Assets and Liabilities and Statements of Financial Affairs until September 5, 2008, pursuant to Rule 1007(a)(4) of the Federal Rules of Bankruptcy Procedure and (c) and Local Rule 1007-1(b). The extension would give the Debtors a total of 77 days from the Petition Date to file their Schedules and Statements. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates the Debtors filed their consolidated list of creditors on the Petition Date and have more than 200 creditors. In accordance with Bankruptcy Rule 1007(c) and Local rule 1007-1(b), the Debtors are required to file their Schedules and Statements within 30 days after the Petition Date. According to Ms. Morgan, a 47-day allowance is necessary due to a large number of creditors involved, the size and complexity of the Debtors' businesses, and limited staffing available to gather, process and complete the Debtors' Schedules and Statements. While the Debtors have endeavored to complete and file the Statements substantially on time, they have determined that the extension is necessary to enhance the accuracy of the Schedules and Statements while not prejudicing the rights of other claimants and parties-in-interest, Ms. Morgan avers. Committee Objects The Official Committee of Unsecured Creditors ask the Court to deny the Debtors' request extending the time of filing for Schedules and Statements of Financial Affairs. The Debtors should be obliged to timely file their Schedules no later than July 27, 2008, the Committee says. Andrew I. Silfen, Esq., at Arent Fox LLP, in New York, relates that the Debtors present no justification for allowing additional time and there is nothing in the record warranting extension. The Office of the United States Trustee has filed a motion to convert the Debtors' case to Chapter 7, so the Statements and Schedules should be filed before a scheduled hearing on July 30, 2008, he relates. Mr. Silfen says the Debtors anticipate that the wind-down will be completed by early August, so it is critical that the Schedules and Statements be filed prior to the completion of the wind-down. He added that, if the extension is approved by the Court, the Debtors will not be required to file their Schedules and Statements until the Court hears the United States Trustee's motion and the wind-down is completed. Additionally, Mr. Silfen contends, conversion should not be considered until after the Schedules and Statements are filed. At the Committee's behest, Judge Kevin J. Carey will convene a hearing with respect to the Debtors' Motion on July 30, 2008, at 11:30 a.m. (Eastern Time). PROXYMED INC: Bid Price Rule Offense Cues Nasdaq to Delist Stocks ----------------------------------------------------------------- MedAvant Healthcare Solutions, the trade name of ProxyMed Inc., received notice from the Nasdaq Stock Market of the failure of its common stock to maintain a minimum bid price of $1.00 per share for 30 consecutive trading days, as required by Nasdaq Marketplace Rule 4450(a)(5). If at anytime before Jan. 12, 2009, the minimum bid price for the company's common stock closes at $1.00 per share or more for 10 consecutive trading days, Nasdaq will notify the company in writing that its compliance with the rule has been restored. If the company does not demonstrate such compliance by Jan. 12, 2009, Nasdaq will provide written notification of delisting of the company's securities from the Nasdaq Global Market. The company previously received a letter from Nasdaq on April 22, 2008, that notified the company that it had not maintained the minimum value of publicly held shares of $15,000,000 required for continued listing on the Nasdaq Global Market, as set forth in Marketplace Rule 4450(b)(3) (the "MVPHS Rule"). The company had until July 21, 2008, to regain compliance with the MVPHS Rule. The June 16, 2008, letter from Nasdaq has no effect on the April 22, 2008, notice of non-compliance received from Nasdaq. In the event that the company did not regain compliance with the MVPHS Rule by July 21, 2008, then Nasdaq would issue a notice of delisting of the company's securities from the Nasdaq Global Market. The company would then have 7 calendar days from the date of any such delisting notice to appeal the Nasdaq delisting by requesting a hearing before the Nasdaq Listing Qualifications Panel. About ProxyMed Inc. 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. PROXYMED INC: Has Until Today to Appeal Nasdaq's Delisting Verdict ------------------------------------------------------------------ MedAvant Healthcare Solutions, the trade name of ProxyMed Inc., received a Staff Determination Letter from The Nasdaq Stock Market notifying the company that the staff of Nasdaq's Listing Qualifications Department determined, using its discretionary authority under Nasdaq Marketplace Rule 4300 and IM-4300, that the company's common stock would be delisted from Nasdaq. The Letter further stated that Nasdaq would suspend trading in the company's common stock at the opening of trading on Aug. 1, 2008, and then file a Form 25-NSE with the Securities and Exchange Commission to deregister the company's common stock, unless the company appeals Nasdaq's delisting determination. Nasdaq's determination to delist the common stock was based on the company's filing for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code on July 23, 2008, the associated public interest concerns raised by the filing of the Chapter 11 case, concerns regarding the residual equity interests of existing holders of the company's common stock, and the company's ability to sustain compliance with all of Nasdaq's continued listing requirements. The Letter also indicated that, in accordance with Marketplace Rule 4805(a), the company would have seven calendar days, or until July 30, 2008, to appeal the delisting from Nasdaq to a Listing Qualifications Panel. At this time, the company does not plan to appeal the delisting from Nasdaq, but does intend to request that various of its current market makers continue to make markets in the company's common stock on the OTC Bulletin Board and/or the Pink Sheets, as the case may be. In connection with the company's plan to list its common stock on the OTC Bulletin Board and/or the Pink Sheets, the company will request that one of its current market makers apply for a new ticker symbol for the company. About ProxyMed Inc. 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. RANSOM-HEART: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Ransom-Heart, Inc. 7094 University Court Montgomery, Al 36117 Tel: (334) 271-1345 Bankruptcy Case No.: 08-31403 Related Information: Suzzane R. Cristwell, president and chief executive officer, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 24, 2008 Court: Middle District of Alabama (Montgomery) Debtor's Counsel: Max A. Moseley, Esq. Johnston Barton Proctor & Rose LLP 569 Brookwood Village, Suite 901 Birmingham, AL 35209 Tel: (205) 458-9400 Fax: (205) 458-9500 (mam@jbpp.com) Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. REALTY COMPANY: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Realty Company Southeast, LLC aka Russ Lyon Realty Company Southeast 1011 North Val Vista Drive, Suite 101 Gilbert, AZ 85234 Case Number: 08-09188 Involuntary Petition Date: July 23, 2008 Court: District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ John Herbert unsecured loan $20,000 1235 West Sunnyvale #33 Mesa, AZ 85205 Richard Rankin unsecured loan 60,000 19617 South 190th Queen Creek, AZ 85242 Cone Darnell construction 58,000 New Structure Inc. 9923 East Decatur Street Mesa, AZ 85207 SASCO: Moody's Cuts Ratings of 55 Tranches on Scratch, Dent Deals ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 55 tranches issued in 10 transactions from the Structured Asset Securities Corporation GEL shelf. The collateral backing each tranche consists primarily of first lien adjustable-rate and fixed-rate "scratch and dent" mortgage loans. The actions are part of an ongoing, wider review of all RMBS transactions, in light of the deteriorating housing market and rising delinquencies and foreclosures. Many "scratch and dent" pools originated since 2004 are exhibiting higher than expected rates of delinquency, foreclosure, and REO (Real Estate Owned, or properties owned by lenders following foreclosure). The rating adjustments will vary based on current ratings, level of credit enhancement, collateral characteristics, pool-specific historical performance, quarter of origination, and other qualitative factors. Complete rating actions are as follows: Issuer: Structured Asset Securities Corporation 2005-GEL1 Cl. B, downgraded from Ba2 to Caa3 Issuer: Structured Asset Securities Corporation 2005-GEL2 Cl. M-4, downgraded from Baa3 to Ba3 Cl. B, downgraded from Ba1 to Caa3 Issuer: Structured Asset Securities Corporation 2005-GEL3 Cl. M-5, downgraded from Baa3 to B3 Issuer: Structured Asset Securities Corporation 2005-GEL4 Cl. M-4, downgraded from B2 to Caa1 Cl. M-5, downgraded from Caa2 to Ca Issuer: Structured Asset Securities Corporation 2006-GEL1 Cl. M-2, downgraded from A2 to Ba1 Cl. M-3, downgraded from Baa2 to B3, on review for possible downgrade Issuer: Structured Asset Securities Corporation 2006-GEL2 Cl. A-2, downgraded from Aaa to Aa3 Cl. M-1, downgraded from Aa2 to B1 Cl. M-2, downgraded from Aa3 to B2, on review for possible downgrade Cl. M-3, downgraded from A2 to B3, on review for possible downgrade Cl. M-4, downgraded from A3 to Caa2 Cl. M-5, downgraded from Baa2 to Ca Cl. M-6, downgraded from Baa3 to C Issuer: Structured Asset Securities Corporation 2006-GEL3 Cl. A-2, downgraded from Aaa to A2 Cl. A-3, downgraded from Aaa to Baa1 Cl. M-1, downgraded from Aa2 to B2, on review for possible downgrade Cl. M-2, downgraded from Aa3 to B3, on review for possible downgrade Cl. M-3, downgraded from A2 to Caa1 Cl. M-4, downgraded from A3 to Caa2 Cl. M-5, downgraded from Baa1 to Caa3 Cl. M-6, downgraded from Baa2 to Ca Cl. M-7, downgraded from Baa3 to C Cl. B-1, downgraded from Ba1 to C Cl. B-2, downgraded from Ba2 to C Issuer: Structured Asset Securities Corporation 2006-GEL4 Cl. A-2, downgraded from Aaa to A2 Cl. A-3, downgraded from Aaa to Baa1 Cl. M-1, downgraded from Aa2 to B1, on review for possible downgrade Cl. M-2, downgraded from Aa3 to B2, on review for possible downgrade Cl. M-3, downgraded from A1 to B3, on review for possible downgrade Cl. M-4, downgraded from A2 to Caa1 Cl. M-5, downgraded from A3 to Caa2 Cl. M-6, downgraded from Baa1 to Caa3 Cl. M-7, downgraded from Baa2 to Ca Issuer: Structured Asset Securities Corporation 2007-GEL1 Cl. A-3, downgraded from Aaa to Aa1 Cl. M-1, downgraded from Aa2 to B2 Cl. M-2, downgraded from Aa3 to Caa1 Cl. M-3, downgraded from A1 to Caa2 Cl. M-4, downgraded from A2 to Caa3 Cl. M-5, downgraded from A3 to Caa3 Cl. M-6, downgraded from Baa1 to Ca Cl. M-7, downgraded from Baa2 to C Cl. M-8, downgraded from Baa3 to C Cl. B-1, downgraded from Ba1 to C Issuer: Structured Asset Securities Corporation 2007-GEL2 Cl. M-1, downgraded from Aa2 to A2 Cl. M-2, downgraded from Aa3 to Baa2 Cl. M-3, downgraded from A1 to Ba3 Cl. M-4, downgraded from A2 to Caa1 Cl. M-5, downgraded from A3 to Caa2 Cl. M-6, downgraded from Baa1 to Caa3 Cl. M-7, downgraded from Baa2 to Caa3 Cl. M-8, downgraded from Baa3 to Ca Cl. B-1, downgraded from Ba1 to Ca Cl. B-2, downgraded from Ba2 to C SECURITY CAPITAL: Strikes $1.8-Bil. Bailout Deal from XL Capital ---------------------------------------------------------------- Security Capital Assurance Ltd. and its principal operating subsidiaries, XL Capital Assurance Inc., and XL Financial Assurance Ltd., entered into a Master Transaction Agreement with XL Capital Ltd. and certain of XL Capital's affiliates. The Master Transaction Agreement provides for the termination, elimination or commutation of certain reinsurance, guarantees and other agreements with XL Capital and its subsidiaries in exchange for a payment by XL Capital to SCA of $1.775 billion in cash and 8 million shares of XL Capital Class A Ordinary Shares to SCA's subsidiaries, and the transfer of XL Capital's 46% ownership stake in SCA to a trust. Certain financial institutions that are counterparties to credit default swap agreements with XLCA are also parties to the Master Transaction Agreement. Concurrent with the Master Transaction Agreement, SCA also entered into an agreement with Merrill Lynch & Co., Inc. for the termination of eight credit default swaps and the related financial guarantee insurance policies that were issued by XLCA. As of June 30, 2008, due to significant adverse development on loss reserves, XLCA will report negative statutory surplus and XLFA will report negative total statutory capital and surplus. Upon the successful closing of the transactions contemplated by the Master Transaction Agreement, the Merrill Agreement and related agreements, XLCA expects to have positive statutory surplus, and XLFA expects to have positive total statutory capital and surplus. SCA and XL Capital have obtained approval from the New York Insurance Department and the Bermuda Monetary Authority for the Master Transaction Agreement and the transactions contemplated thereby. Other required approvals related to the agreement have been received from the Delaware Department of Insurance. The New York Insurance Department has also approved the Merrill Agreement and the contemplated transactions. The XL Capital deal saves SCA from insolvency, various reports say. "The agreements with XL Capital and Merrill Lynch represent a significant step in the restructuring process of SCA and are critical to our efforts to stabilize the company," commented Paul S. Giordano, Chief Executive Officer of SCA. "While we are very pleased with the progress made to date, our company remains exposed to potentially significant adverse loss development and there is still much work to be done. In the next phase, we will commence discussions with swap counterparties seeking to commute, terminate or restructure our remaining credit default swaps. The New York Insurance Department, the Bermuda Monetary Authority, the Delaware Department of Insurance and the UK Financial Services Authority, as well as our other regulators, have been extremely supportive in this process, and we look forward to continuing to work constructively with them in the future." Master Transaction Agreement According to the Master Transaction Agreement signed July 28, 2008, a number of reinsurance, guarantees and other arrangements among SCA and its subsidiaries and XL Capital and its subsidiaries will be terminated, eliminated or commuted in return for the payment by XL Capital and certain of its affiliates of $1.775 billion in cash, 8 million of XL Capital's Class A Ordinary Shares to XLCA and XLFA and the transfer of XL Capital's 46% ownership of SCA into a trust. The SCA shares currently owned by XL Capital will be transferred at the closing of the Master Transaction Agreement into a trust for the benefit of XLCA until such time as an agreement between XLCA and the Financial Counterparties is reached, and thereafter such SCA shares will be held for the benefit of the Financial Counterparties. To the extent that the required regulatory approvals for the transfer are not received prior to such closing, the SCA shares will be deposited into escrow pending the transfer. Upon any such deposit into escrow, XL will irrevocably disclaim any and all voting, economic and other rights with respect to the SCA shares. In connection with the transfer of the SCA shares, XL Capital will no longer have the right to nominate directors to SCA's Board of Directors. As a condition to closing, the four XL Capital-nominated Directors on SCA's Board of Directors, Messrs. Fred Corrado, Paul Hellmers, Gardner Grant, Jr. and Jonathan Bank, are expected to resign from SCA's Board of Directors at closing. After the closing of the transactions contemplated by the Master Transaction Agreement, substantially all reinsurance agreements and guarantees with XL Capital and subsidiaries will be eliminated. Merrill Agreement Pursuant to the Merrill Agreement, SCA, XLCA, Merrill Lynch, Merrill Lynch International and eight trusts affiliated with SCA, the obligations of which are guaranteed by policies issued by XLCA, agreed to terminate eight credit default swaps and the related financial guarantee insurance policies issued by XLCA, with an insured gross par outstanding as of June 30, 2008 of $3.74 billion, in exchange for a payment by XLCA to Merrill Lynch of an aggregate amount of $500 million. As part of the closing of the transactions contemplated by the Merrill Agreement, the parties will provide mutual releases of claims with respect to the Swaps and the related policies. In addition, XLCA and MLI have agreed to dismiss, after the closing of the transaction, the litigation related to seven of the Swaps. Second Quarter 2008 Developments SCA has conducted a review of its June 30, 2008 loss reserves. Based on the preliminary results of this review, SCA believes that its case reserves will have increased substantially as of June 30, 2008, primarily due to significant deterioration with respect to the Company's exposure to collateralized debt obligations of asset-backed securities and residential mortgage-backed securities. As a result, SCA's New York-based insurance subsidiary, XLCA, will report negative statutory surplus and its Bermuda-based reinsurance subsidiary, XLFA, will report negative total statutory capital and surplus as of June 30, 2008. Going Concern Doubt Upon the successful closing of the transactions contemplated by the Master Transaction Agreement, the Merrill Agreement and related agreements, pending the satisfaction of certain conditions, XLCA expects to have positive statutory surplus and XLFA expects to have positive total statutory capital and surplus. In the absence of the consummation of the transactions contemplated by the Master Transaction Agreement, the Merrill Agreement and related agreements, XLCA and XLFA would likely be subject to regulatory action by their primary regulators, the New York Insurance Department and the Bermuda Monetary Authority. As a result of these developments, there is substantial doubt about the Company's ability to continue as a going concern. Upon the closing of the transactions contemplated by the Master Transaction Agreement, the Merrill Agreement and other related agreements, SCA intends to re-assess whether substantial doubt exists about the Company's ability to continue as a going concern. Closings of the Master Transaction Agreement and the Merrill Agreement The closings of the transactions contemplated by the Master Transaction Agreement, the Merrill Agreement, and other agreements are expected to occur concurrently in early August 2008. In addition to customary closing conditions, the closings are also subject to the completion by XL Capital of a registered public offering of its equity and equity units. XL Capital plans to offer approximately $2.5 billion of securities in a combination of ordinary shares and equity security units pursuant to the company's existing shelf registration statement. Each Equity Security Unit will consist of (i) a forward purchase contract requiring the holder to purchase, and XL to issue, a variable number of ordinary shares of XL and (ii) an ownership interest in a debt security of XL. It has not yet determined the exact breakdown between Ordinary Shares and Equity Security Units, but currently expects that the Ordinary Shares will constitute approximately $1.75 to $2.0 billion of the total. XL Capital intends to use the net proceeds from the Offerings to pay $1.775 billion in connection with the Security Capital agreement and for general corporate purposes including capital funding of certain of the company's subsidiaries. The joint book-running managers for the Offerings are Goldman, Sachs & Co. and UBS Investment Bank. Full details of the Offerings, including a description of the Ordinary Shares and the Equity Security Units and certain risk factors related to the Company and these securities, will be contained in a prospectus supplement that will be available through the underwriters. SCA and XL Capital may choose to terminate the Master Transaction Agreement if the closing does not occur by August 15, 2008. Further, concurrent with the execution of the Master Transaction Agreement, XLFA has entered into an agreement with Financial Security Assurance to commute all business reinsured by XLFA under reinsurance agreements between the parties. XLCA has agreed to directly reinsure a portion of such commuted business. In addition, XLFA has entered into agreements to commute certain other ceded reinsurance contracts. The negotiations of the Master Transaction Agreement and the Merrill Agreement, as well as the continuing discussions among SCA, certain policyholders and other interested parties, have been facilitated by the New York Insurance Department. SCA has also worked closely with the Bermuda Monetary Authority, the UK Financial Services Authority, the Delaware Department of Insurance and other relevant authorities regarding these agreements. While SCA expects the transactions contemplated by the Master Transaction Agreement, the Merrill Agreement and the other related agreements to close by August 15, 2008, there can be no assurance that all the closing conditions will be satisfied or waived. Therefore, there can be no assurance that the transactions described under the Master Transaction Agreement, the Merrill Agreement and other related agreements will be consummated or that the New York Insurance Department and the Bermuda Monetary Authority, or other regulators, will not take regulatory action at any time with respect to SCA's operating subsidiaries. Agreement with Financial Counterparties In consideration of the releases and waivers agreed to by the Financial Counterparties as part of the Master Transaction Agreement, XLCA has agreed to hold an aggregate amount of $820 million in cash (plus the interest thereon, premiums paid by the Financial Counterparties from July 28 through October 15, 2008 and any proceeds from the sale by the trust of the SCA shares, in the event such shares are sold) for the purpose of commuting, terminating, amending or otherwise restructuring existing agreements with the Financial Counterparties pursuant to an agreement to be negotiated with the Financial Counterparties. In the event that such agreement is not reached by October 15, 2008, XLCA has agreed to use such proceeds only to pay claims under the credit default swaps of the Financial Counterparties. In addition, through such date, XLCA and XLFA have agreed to restrictions on their ability to commute, terminate, amend or otherwise restructure policies and contracts to which either is a party. Corporate Name Change SCA will formally change its corporate name on August 4, 2008, from Security Capital Assurance Ltd. to Syncora Holdings Ltd. SCA's operating subsidiaries will also change names on the same date: XLCA will become Syncora Guarantee Inc. and XLFA will become Syncora Guarantee Re Ltd. As of August 4, 2008, SCA is no longer permitted to use the "XL" name. The Company's stock ticker symbol will remain "SCA". About XLCA XL Capital Assurance Inc. (XLCA) delivers credit enhancement for the obligations of debt issuers worldwide. It guarantees US municipal bonds; asset-backed securities; debt backed by utilities and selected infrastructure projects; specialized risks, including future flow securitizations and bank deposit insurance; and collateralized debt obligations (CDOs). It provides financial guarantee that is unconditional and irrevocable and, in the process, help clients overcome a broad spectrum of strategic, competitive and financial challenges. About SCA Security Capital Assurance Ltd (SCA) -- http://www.scafg.com/-- through its subsidiaries -- XL Capital Assurance Inc., (XLCA) a monoline financial guarantee insurance provider, and XL Financial Assurance Ltd. (XLFA), a monoline provider of reinsurance to financial guarantee insurers -- provides credit enhancement for the obligations of debt issuers worldwide. As reported by the Troubled Company Reporter on June 23, 2008, Moody's Investors Service downgraded to B2, from A3, the insurance financial strength ratings of XL Capital Assurance Inc., XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd. In the same rating action, Moody's also downgraded the debt ratings of Security Capital Assurance Ltd (NYSE: SCA -- preference shares to Ca from B3) and a related financing trust. * * * As reported by the Troubled Company Reporter on June 23, 2008, Moody's Investors Service downgraded to B2, from A3, the insurance financial strength ratings of XL Capital Assurance Inc., XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd. In the same rating action, Moody's also downgraded the debt ratings of Security Capital Assurance Ltd (NYSE: SCA -- preference shares to Ca from B3) and a related financing trust. The rating action concludes a review for possible downgrade that was initiated on March 4, 2008, and reflects the company's severely impaired financial flexibility and the company's proximity to minimum regulatory capital requirements relative to Moody's estimations of expected case losses. The outlook for the ratings is negative. SECURITY CAPITAL: Inks Forbearance and Waiver Pact with Lenders --------------------------------------------------------------- Security Capital Assurance Ltd. entered into an amendment, forbearance and limited waiver agreement with respect to its Credit Agreement, dated as of Aug. 1, 2006, as amended. Pursuant to the Credit Agreement Amendment, SCA agreed: (i) to permanently reduce the availability under its revolving credit facility from $250.0 million to zero; (ii) to reduce the availability under the letter of credit facility to the amount of the letter of credit exposure as of July 28, 2008; and (iii) that upon the closing of the Master Transaction Agreement, it will cash collateralize the remaining letters of credit after giving effect to the transactions contemplated by the Master Transaction Agreement. In consideration of the foregoing, the lenders under the Credit Agreement have agreed to: (i) forbear from declaring certain defaults, if any, set forth in the Credit Agreement Amendment; (ii) waive the defaults, if any, upon the satisfaction of certain conditions set forth in the Credit Agreement Amendment; and (iii) grant certain waivers in connection with the consummation of the Master Transaction Agreement. SCA and its principal operating subsidiaries, XL Capital Assurance Inc. and XL Financial Assurance Ltd., also entered into an agreement with XL Capital Ltd. and certain of XL Capital's affiliates. Certain financial institutions that are counterparties to credit default swap agreements with XLCA are also parties to the Master Transaction Agreement. The Master Transaction Agreement provides for the termination, elimination or commutation of certain reinsurance, guarantees and other agreements with XL Capital and its subsidiaries in exchange for a payment by XL Capital to SCA of $1.775 billion in cash and 8 million shares of XL Capital Class A Ordinary Shares to SCA's subsidiaries, and the transfer of XL Capital's 46% ownership stake in SCA to a trust. Concurrent with the Master Transaction Agreement, SCA also entered into an agreement with Merrill Lynch & Co., Inc. for the termination of eight credit default swaps and the related financial guarantee insurance policies that were issued by XLCA. Additionally, as of June 30, 2008, due to significant adverse development on loss reserves, XLCA will report negative statutory surplus and XLFA will report negative total statutory capital and surplus. Upon the closing of the transactions contemplated by the Master Transaction Agreement, the Merrill Agreement and related agreements, XLCA expects to have positive statutory surplus, and XLFA expects to have positive total statutory capital and surplus. SCA and XL Capital have obtained approval from the New York Insurance Department and the Bermuda Monetary Authority for the Master Transaction Agreement and the transactions contemplated thereby. Other required approvals related to the agreement have been received from the Delaware Department of Insurance. The New York Insurance Department has also approved the Merrill Agreement and the transactions contemplated thereby. "The agreements with XL Capital and Merrill Lynch represent a significant step in the restructuring process of SCA and are critical to our efforts to stabilize the company," Paul S. Giordano, chief executive officer of sca, commented. "While we are very pleased with the progress made to date, our company remains exposed to potentially significant adverse loss development and there is still much work to be done. In the next phase, we will commence discussions with swap counterparties seeking to commute, terminate or restructure our remaining credit default swaps. The New York Insurance Department, the Bermuda Monetary Authority, the Delaware Department of Insurance and the UK Financial Services Authority, as well as our other regulators, have been extremely supportive in this process, and we look forward to continuing to work constructively with them in the future." Corporate Name Change SCA will formally change its corporate name on Aug. 4, 2008, from Security Capital Assurance Ltd. to Syncora Holdings Ltd. SCA's operating subsidiaries will also change names on the same date: XLCA will become Syncora Guarantee Inc. and XLFA will become Syncora Guarantee Re Ltd. As of Aug. 4, 2008, SCA is no longer permitted to use the "XL" name. The company's stock ticker symbol will remain "SCA". About SCA Security Capital Assurance Ltd (SCA) -- http://www.scafg.com/-- through its subsidiaries -- XL Capital Assurance Inc., (XLCA) a monoline financial guarantee insurance provider, and XL Financial Assurance Ltd. (XLFA), a monoline provider of reinsurance to financial guarantee insurers -- provides credit enhancement for the obligations of debt issuers worldwide. As reported by the Troubled Company Reporter on June 23, 2008, Moody's Investors Service downgraded to B2, from A3, the insurance financial strength ratings of XL Capital Assurance Inc., XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd. In the same rating action, Moody's also downgraded the debt ratings of Security Capital Assurance Ltd (NYSE: SCA -- preference shares to Ca from B3) and a related financing trust. * * * As reported in the Troubled Company Reporter on June 23, 2008, Moody's Investors Service has downgraded to B2, from A3, the insurance financial strength ratings of XL Capital Assurance Inc., XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd. In the same rating action, Moody's also downgraded the debt ratings of Security Capital Assurance Ltd (NYSE: SCA -- preference shares to Ca from B3) and a related financing trust. SIRIUS SATELLITE: Expects 25% Revenue Increase in 2008 2nd Quarter ------------------------------------------------------------------ SIRIUS Satellite Radio Inc. reported on Monday preliminary financial results for the second quarter ended June 30, 2008, including a 25% increase in revenue to $283.0 million, total subscribers in excess of 8.9 million and a 70% decrease in its adjusted loss from operations. As of June 30, 2008, SIRIUS had 8.924 million subscribers, an increase of 25% from June 30, 2007 subscribers of approximately 7.1 million. Retail subscribers increased 7% in the second quarter 2008 to 4.677 million from 4.365 million in the second quarter 2007. OEM subscribers increased 53% in the second quarter 2008 to 4.247 million from 2.778 million in the second quarter 2007. Total gross subscriber additions for the quarter ended June 30, 2008, were 1.029 million, compared to 1.002 million for the quarter ended June 30, 2007, and 1.003 million for the quarter ended March 31, 2008. During the second quarter 2008 SIRIUS added 279,820 new net subscribers, consisting of 246,221 from the OEM channel and 33,599 from the retail channel. Second quarter 2008 average monthly self-pay customer churn rate was 1.6%, down from 2.1% in first quarter 2008. The second quarter 2008 conversion rate is estimated to be approximately 48%, up from the first quarter 2008 conversion rate of approximately 47%. Total revenue for the second quarter 2008 is expected to be approximately $283.0 million, an increase of 25% from the second quarter 2007 total revenue of $226.0 million. Operating expenses, excluding depreciation and stock based compensation, are expected to remain approximately flat in the second quarter 2008 as compared to the second quarter 2007. Second quarter 2008 adjusted loss from operations is expected to be approximately $24.0 million, an improvement of 70% from the adjusted loss from operations of $79.0 million in the second quarter 2007. About SIRIUS Satellite Headquartered in New York, SIRIUS Satellite Radio Inc. (Nasdaq: SIRI) -- http://www.sirius.com/-- offers over 130 channels to its subscribers -- 69 channels of 100% commercial-free music and 65 channels of sports, news, talk, entertainment, data and weather for a monthly subscription fee of $12.95. SIRIUS is the Official Satellite Radio Partner of the NFL and NASCAR, and broadcasts live play-by-play games of the NFL as well as live NASCAR races. As of June 30, 2008, SIRIUS radios were available as a factory and dealer-installed option in 126 vehicle models and as a dealer only-installed option in 45 vehicle models. Forbes.com's Brian Wingfield reported Saturday that the Federal Communications Commission finally approved late Friday the merger between XM Satellite Radio Holdings and Sirius Satellite Radio, in a 3-2 vote, following an agreement by the companies to voluntarily pay a combined $19.7 million in fines for prior FCC violations. As reported in the Troubled Company Reporter on May 14, 2008, the company's balance sheet at March 31, 2008, showed $1.5 billion in total assets and $2.3 billion in total liabilities, resulting in a rougly $839.4 million stockholders' deficit. * * * As reported in the Troubled Company Reporter on July 24, 2008, Moody's Investors Service placed all ratings for Sirius Satellite Radio Inc. under review for possible downgrade, including the company's "Caa1" corporate family rating. In addition, Moody's downgraded the company's Speculative Grade Liquidity rating to SGL-4 from SGL-2. SOLOMON TECHNOLOGIES: Issues 6,821,360 Shares of Common Stock ------------------------------------------------------------- Solomon Technologies Inc. issued 6,821,360 shares of common stock, on July 21, 2008, par value $.001 per share, to three holders of its Variable Rate Self-Liquidating Senior Secured Convertible Debentures due Sept. 1, 2009. These shares of common stock were issued pursuant to the pre-redemption provisions of the debentures. On July 21, 2008, the company issued to Richard A. Fisher 1,583,334 restricted shares of common stock in payment for services provided as corporate counsel to the company. The company issued 8,775,306 shares of common stock, on June 18, 2008, par value $.001 per share, to two holders of its Variable Rate Self-Liquidating Senior Secured Convertible Debentures due April 17, 2009. These shares of Common Stock were issued to one holder pursuant to the pre-redemption provisions of the Debentures and to the second holder pursuant to an agreement entered into with the company to redeem the remaining one-half of that holder's Debentures on July 1, 2008. On June 20, 2008, the Company issued 4,573,016 shares of Common Stock to three holders of its Debentures pursuant to the pre- redemption provisions of the Debentures. Headquartered in Tarpon Springs, Florida, Solomon Technologies Inc. (OTC BB: SOLM.OB) -- http://www.solomontechnologies.com/-- through its Motive Power and Power Electronics divisions, develops, licenses, manufactures and sells precision electric power drive systems. Solomon Technologies Inc.'s consolidated balance sheet at March 31, 2008, showed $9,094,518 in total assets and $15,239,105 in total liabilities, resulting in a $6,144,587 total stockholders' deficit. * * * Eisner LLP, in New York, expressed substantial doubt about Solomon Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company has incurred significant recurring operating losses, has a working capital deficit and capital deficit, is delinquent in the payment of payroll taxes and balances to certain employees, and is in default of certain notes and debentures. SOLAR COSMETIC: Sells IP for $8.5MM; Resolves Feud with Committee ----------------------------------------------------------------- Sun & Skin Care Research Inc.'s $8.5 million offer won at a July 24, 2008 auction for the intellectual property and inventory of Solar Cosmetic Labs Inc. and Solar Packaging Corp., The Deal's John Blakeley states. Sun & Skin overtook a $4 million offer by stalking horse bidder, Village Suncare LLC, Debtor counsel, Peter Shapiro, Esq., at Shutts & Bowen LLP, said. Mr. Shapiro, The Deal says, said that Sun & Skin's bid was all cash and guaranteed by May 31, 2009. The Hon. Laurel Isicoff of the U.S. Bankruptcy Court for the Southern District of Florida approved the sale to Sun & Skin, The Deal reports. The sale will close 10 days following issuance of a court order, The Deal quotes Mr. Shapiro as saying. As reported in the Troubled Company Reporter on July 7, 2008, the Debtor and The Village Suncare LLC entered into an asset purchase agreement in connection with the sale of substantially all of the Debtors' intangible assets and certain inventory. The agreement provided that the purchaser will pay the seller $4,000,000 in cash, among others. Under the agreement, Village Suncare will receivea $120,000 break-up fee. The Deal reveals that the Debtor intends to use the sale proceeds to satisfy a $2.4 million debtor-in-possession debt owed to KeyBank NA. Creditors' Committee Abandons Case Conversion Motion According to The Deal, since the sale generated twice as much cash as expected, a dispute among the Debtors and the Official Committee of Unsecured Creditors was resolved. The Committee also withdrew its motion to convert the Debtors' chapter 11 case to a chapter 7 liquidation proceeding, The Deal notes. The TCR on June 6, 2008, reported that the Committee contended that certain provisions of the DIP financing entered with Key Bank are defective. The Committee pointed out that the agreement allows the bank to get security interest and superiority claims in the proceeds of the Debtors' bankruptcy avoidance actions that violates the provisions under chapter 11. In addition, the agreement has unreasonable termination provisions with two to three days to cure certain defaults, which enable the bank to terminate the agreement without court order, the Committee added. The Committee alleged that the agreement will allow the bank to take control in the liquidation of its collateral, which will result in the reduction of the Debtor's prepetition debt with the bank. The Debtors have sold most of their assets and is identifying a qualified purchaser for their remaining assets at present. Key Bank said that the Committee's motion is devoid of merit. The bank added that the Committee's request to convert the Debtors' case to chapter 7 at this stage of the proceeding is not in the best interest of creditors and the estate. The Debtors, the bank said, have continued to operate their business and produce and ship product since the bankruptcy filing. The Debtors continue to pay their ongoing obligations, including those to suppliers, employees, and taxing authorities. The bank said that the Debtors have been generating positive cash flow under chapter 11. Key Bank said that the Debtors have been actively marketing their assets through the help of Development Specialists Inc. Conversion to chapter 7 now would destroy these efforts, the bank asserted. About Solar Cosmetic Miami Gardens, Florida-based Solar Cosmetic Labs Inc. -- http://www.solarcosmetics.com/-- and -- http://www.bodyandearth.com/-- manufacture, markets and sells perfumes, cosmetics, and other toilet preparations. Solar Packaging Corp. is the holder of certain operating licenses and is a guarantor of certain of Solar Cosmetic's obligations. The company and Solar Packaging Corp. filed chapter 11 petition on May 6, 2008 (Bankr. S.D. Fla. Case Nos. 08-15793 and 08-15796). Judge Laurel Isicoff presides the case. Peter E. Shapiro, Esq., at Shutts & Bowen, LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Jeffrey P. Bast, Esq. The Debtors' schedule showed total assets of $13,925,425 and total liabilities of $50,928,780. SOLUTIA INC: Court to Hear Settlement of Avoidance Actions Today ---------------------------------------------------------------- Solutia Inc. and its debtor-affiliates, in accordance with their confirmed Fifth Amended Joint Plan of Reorganization, as modified, sought the authority of the U.S. Bankruptcy Court for the Southern District of New York to pursue, settle, abandon, release or otherwise resolve certain pending avoidance actions without further notice to any party or the consent or approval of Monsanto Company, the Official Committee of Unsecured Creditors or the Court. On May 4, 2006, the Court approved the Debtors' employment of Hodgson Russ LLP for the limited purpose of commencing and prosecuting the Avoidance Actions, seeking recovery of preferential transfers and fraudulent conveyances, made by the Debtors pursuant to Chapter 5 and other relevant provisions of the Bankruptcy Code or applicable state law. By a separate order, on the same day, the Court also approved the Debtors' employment of Rosen & Associates to represent them in certain of the Avoidance Actions with respect to which Hodgson Russ might have had a conflict. The time for filing adversary proceeding complaints under Sections 544, 547, 548 and 550 of the Bankruptcy Code expired on Dec. 17, 2005. Between Dec. 14 and 17, 2005, Hodgson Russ and Rosen & Associates timely filed 82 complaints commencing the Avoidance Actions against various defendants. A list of the 82 Avoidance Actions is available at no charge at: http://bankrupt.com/misc/Solutia_82AvoidanceActions.pdf In an effort to conserve judicial, legal, financial and other resources, the Debtors sought and obtained extension of the deadline to serve complaints in the Avoidance Actions. The Debtors stated that they anticipate their eventual plan of reorganization might eliminate the necessity to further prosecute certain of the Avoidance Actions, many of which involved defendants who continued to do business with the Debtors, Garry M. Graber, Esq., at Hodgson Russ LLP, in New York, related. The Debtors' Plan was confirmed on Nov. 29, 2007, and became effective on Feb. 28, 2008. Several of the Avoidance Actions have been settled and dismissed during the course of the Debtors' Chapter 11 proceedings. None of the defendants has sought to expedite the litigation of any of the Avoidance Actions. Six of the defendants have filed an answer or other papers responsive to the complaints filed in the Avoidance Actions. No further proceedings or discovery has been had in any of the adversary proceedings, according to Mr. Graber. To conserve resources and achieve beneficial economies, and to expedite resolution of the adversary proceedings that remain pending, the Reorganized Debtors wish to exclusively pursue certain Avoidance Actions based solely upon their business judgment. This matter will be presented to the Court today, July 30, 2008. About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, manufactures and sells chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 129; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SPHERIX INC: Share Rule Violation Cues Nasdaq to Delist Securities ------------------------------------------------------------------ Spherix Incorporated received written notification from NASDAQ advising the company that the bid price of the company's common stock for the last 30 consecutive business days had closed below the minimum $1.00 per share required for continued listing on NASDAQ. This notice has no effect on the listing of the common stock at this time. Spherix has been provided an initial period of 180 calendar days, or until Jan. 20, 2009, to regain compliance with the minimum price requirement. The notification further provides that NASDAQ will provide written notification stating that the company has achieved compliance if at any time before Jan. 20, 2009, the bid price of its common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. Under certain circumstances, NASDAQ has the discretion to require compliance for a period in excess of ten 10 consecutive business days, but generally such extended period does not exceed twenty 20 consecutive business days. If the company does not regain compliance with this rule by Jan. 20, 2009, NASDAQ will provide notice to the company that its common stock will be delisted from NASDAQ. If the company receives such a letter, the company will have an opportunity to appeal the determination. The company is considering seeking stockholder approval for a reverse stock split to address the bid price deficiency. About Spherix Incorporated Headquartered in Beltsville, Maryland, Spherix Incorporated (NASDAQ:SPEX) -- http://www.spherix.com/-- operated through two segments: InfoSpherix and BioSpherix prior to Aug. 15, 2007. BioSpherix develops products for commercial applications, while InfoSpherix provided contact center information and reservations services for government and industry. The company's focus is on the non-food use of tagatose, which Spherix plans to market under the name Naturlose. Its principal efforts have been to explore whether Naturlose is an effective treatment for Type 2 diabetes. ST BERNARD: Completes Debt Refinancing, May Access $1.5MM Credit ---------------------------------------------------------------- St. Bernard Software Inc. completed its debt refinancing and enhanced its line of credit with Partners for Growth II L.P. The agreement provides access to a $1.5 million revolving line of credit that will be used to pay off a high interest rate bridge note and provide access to additional working capital to support the company's growth. On July 21, 2008, St. Bernard entered into a Loan and Security Agreement and certain other loan documents with Partners for Growth, which became effective on July 23, 2008. Pursuant to the terms of the loan agreement, PFG provided St. Bernard with a revolving line of credit in the amount not to exceed the lesser of: (a) $1,500,000 at any one time outstanding; or (b) up to 30% of the amount of St. Bernard's aggregate Eligible Billings over a rolling three month period calculated monthly. The annual interest rate on the Loan is set at Prime Rate, quoted by Silicon Valley Bank as its Prime Rate from time to time, plus 3%. St. Bernard is required to maintain a minimum borrowing amount of at least $750,000 or pay PFG a minimum interest amount equal to $750,000, times the Applicable Rate, times the number of days from the date of such failure to maintain the Minimum Borrowing Amount to the maturity date. Pursuant to the terms of the loan agreement, St. Bernard paid PFG a one-time commitment fee of $30,000 and agreed to reimburse PFG for PFG's reasonable attorneys' fees in connection with the negotiation of the loan agreement. Subject to the requirement to maintain the minimum borrowing amount or pay the minimum interest amount, St. Bernard may borrow, repay and reborrow from time to time until the maturity date. Proceeds of the initial loan amount will be used to pay all indebtedness owing to Agility Capital LLC, with the remaining amount to be used for working capital. The loan agreement will terminate on July 20, 2010, on which date all principal, interest and other outstanding monetary obligations must be repaid to PFG. The obligations under the loan agreement are secured by a security interest in collateral comprised of substantially all of St. Bernard's assets. The loan agreement contains affirmative, negative and financial covenants customary for credit facilities of this type, including, among other things, limitations on indebtedness, liens, sales of assets, mergers, investments, and dividends. The loan agreement also requires that St. Bernard maintain a Modified Net Income greater than zero. The loan agreement contains events of default customary for credit facilities of this type and provides that upon the occurrence and during the continuance of an event of default, among other things, the interest rate on all borrowings will be increased, the payment of all borrowings may be accelerated, PFG's commitments may be terminated and PFG shall be entitled to exercise all of its rights and remedies, including remedies against the collateral. A full-text copy of the agreement is available for free at http://ResearchArchives.com/t/s?3029 In connection with the execution of the loan agreement, St. Bernard issued a warrant to PFG on July 21, 2008, which allows PFG to purchase up to 450,000 shares of St. Bernard common stock at an exercise price equal to $0.46 per share. The Warrant expires on July 20, 2013. A full-text copy of the warrants to purchase is available for free at http://ResearchArchives.com/t/s?302a The new agreement provides the company with several advantages, including additional borrowing availability, dramatically reduced interest rate, and greater flexibility in managing working capital. "We are pleased with the confidence that Partners for Growth has shown in our growing business," Vince Rossi, president and CEO of St. Bernard, said. "Our continued delivery of operating results has enabled us to establish this new relationship and gives us the ability to better manage our growth. This new credit facility allows for greater flexibility, and will be used to support our growth in 2008, and beyond." About St. Bernard Software Inc Headquartered in San Diego, California, St. Bernard Software Inc. (OTC BB: SBSW) -- http://www.stbernard.com/-- provides security appliances and hosted solutions, including secure content management and archiving. The company sells and supports its products directly and through solution partners worldwide. St. Bernard Software Inc.'s consolidated balance sheet at March 31, 2008, showed $13,199,000 in total assets and $21,281,000 in total liabilities, resulting in a $8,082,000 total stockholders' deficit. SUNCREST LLC: Committee Wants Chapter 11 Case Converted ------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy case of SunCrest LLC asks the United States Bankruptcy Court for the District of Utah in Salt Lake City to convert the Chapter 11 case of the Debtor to a Chapter 7 liquidation proceeding, Bloomberg News reports. According to Bloomberg, the Committee says that the sale, which was approved in June 2008, by the Court, has no benefit to any creditor other than Zion First National Bank. As reported in the Troubled Company Reporter on June 27, 2008, the bank made a credit bid of at least $25,300,0000 beating an undisclosed bidder's offer. The Debtor owes $45,000,000 to Zion First. The Committee contends that the sale is meant for Zion First to: -- exchange $25,000,000 of its secured debt; -- pay $250,000 cash; and -- assume the cost of curing contract defaults totaling $19,000,000. The Committee's counsel, Bloomberg says, argued that there is not enough cash left to pay the outstanding expenses of the Debtor's Chapter 11 effort. The Court has yet to set a date to consider the Committee's conversion plea, Bloomberg notes. About SunCrest Headquartered in Draper, Utah, SunCrest LLC fdba Dae/Westbrook LLC -- http://www.suncrest.com-- develops mountaintop community in Draper. The company filed for Chapter 11 protection on April 11, 2008 (Bankr. D. Utah Case No.08-22302). Joel T. Marker, Esq., at McKay Burton & Thurman, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 19 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. David E. Leta, Esq., and Engels Tejeda, Esq., at Snell & Wilmer in Salt Lake City, Utah, represent the Committee in this case. The Debtor listed $46,442,365 in total assets and $96,587,367 in total debts. SUPERIOR INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Superior Industries, Inc. 33 Great Rd. P.O. Box 777 Shirley, MA 01464 Bankruptcy Case No.: 08-42404 Chapter 11 Petition Date: July 28, 2008 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtor's Counsel: David M. Nickless, Esq. Email: dnickless.nandp@verizon.net Nickless & Phillips, PC 625 Main St. Fitchburg, MA 01420 Tel: (978) 342-4590 Fax: (978) 343-6383 Estimated Assets: $500,000 to $1,000,000 Estimated Debts: $1,000,000, to $10,000,000 A copy of 's petition is available for free at: http://bankrupt.com/misc/mab08-42404.pdf SYNTAX-BRILLIAN: U.S. Trustee & Panel Balks at Sale Bid Procedures ------------------------------------------------------------------ Roberta A. DeAngelis, the U.S. Trustee for Region 3, and the Official Committee of Unsecured Creditor object to a request to approve proposed bidding procedures for the sale of certain assets of Syntax-Brillian Corporation and its debtor-affiliates. As reported in the Troubled Company Reporter on July 9, 2008, the Debtors entered into an asset purchase agreement to sell certain of their assets to Olevia International Group, LLC, which is under common ownership with TCV Group. Under the terms of the agreement, Olevia International will assume $60 million of the Debtors' secured debt obligations to Silver Point Finance LLC in exchange for the purchased assets. Silver Point committed to provide up to $23 million in debtor-in-possession financing to the Debtors under a certain DIP credit and guaranty agreement. To recall, the Debtors were allowed to access at least $7.5 million in financing, on an interim basis. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?2f40 The U.S. Trustee and the Committee allege that the proposed sale bid procedures contains unusual bidding protection in the event the Debtors consummate the sale to another party. The parties point out that the $3 million break-up fee, or 5.8% of the purchase price, is excessive. The Committee asks the Court to reduce the proposed amount of the break-up fee to $1.5 million. The proposed 5.8% break-up fee doubles the 3% allowed in this district, the U.S. Trustee contends. Furthermore, any purchaser would be required to purchase Olevia International's 51% interest in DigiMedia Technology Co., Ltd., other than the Debtors' assets, for $35 million under a competing bid, the U.S. Trustee points out. DigiMedia is a partner of the Debtors. Accordingly, the U.S. Trustee and the Committee ask the Court to deny approval of the Debtors' proposed bid procedures. A hearing is set for July 30, 2008, at 11:00 a.m., to consider the parties' request. Syntax-Brillian's Proposed Sale Protocol Deadline for submitting competing offers is on Aug. 15, 2008, at 5:00 p.m. (Prevailing Eastern Time.) Bid is accompanied by a cash deposit in an amount equal to 10% of the purchase price. An auction will take place on Aug. 19, 2008, at 11:00 a.m., at the law offices of Greenberg Traurig LLP, The Nemours Building, 1007 North Orange Street, Suite 1200 in Wilmington, Delaware. A sale hearing is set for Aug. 20, 2008, to consider approval of the Debtors' sale bid procedures. Objections, if any, are due Aug. 13, 2008. The closing of the sale is expected to occur by Sept. 2, 2008. About Syntax-Brillian Headquartered in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC) -- www.syntaxbrillian.com -- manufactures and markets LCD HDTVs, digital cameras, and consumer electronics products include Olevia(TM) brand high-definition widescreen LCD televisions and Vivitar brand digital still and video cameras. Syntax-Brillian is the sole shareholder of California-based Vivitar Corporation. The company and two of its affiliates -- Syntax-Brillian SPE, Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection on July 8, 2008 (Bankr. D. Delaware Lead Case No.08-11409 through 08-11409. Dennis A. Meloro, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 has appointed five creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TIMOTHY RAGEN: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Timothy Michael Ragen 300 Lee Boulevard Savannah, GA 31405 Bankruptcy Case No.: 08-41325 Chapter 11 Petition Date: July 25, 2008 Court: Southern District of Georgia (Savannah) Debtors' Counsel: Richard C. E. Jennings, Esq. (skipjenningspc@comcast.net) Law Offices Of Skip Jennings, PC 115 W Oglethorpe Ave. Savannah, GA 31401 Tel: (912) 234-6872 Fax: (912) 236-7549 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/gasb08-41325.pdf TRADEWINDS AIRLINES: Files for Bankruptcy in Florida ---------------------------------------------------- TradeWinds Airlines Inc. filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code, before the U.S. Bankruptcy Court for the Southern District of Florida in Miami, due to rising fuel, maintenance costs, and declining demand, various sources report. The company listed assets of between $1 million and $10 million and debts of between $10 million and $50 million, the reports say. "[The company is] suffering from the same macro-economic problems as other airlines, including the cost of fuel and demand going down," a person familiar with the matter said. "[It] is actually looking at several different strategies for reorganization. It's our intention to identify a bankruptcy exit strategy within the next 60 days," this person relates. According to Bloomberg News, other airlines who filed for bankruptcy earlier this year includes: -- Aloha Airgroup Inc.; -- ATA Airlines Inc.; -- Skybus Airlines Inc.; -- Frontier Airlines Holdings Inc.; and -- Eos Airlines Inc. "[The company] faced the perfect storm of adverse market conditions," Bloomberg quoted Jeff Conry, chief executive officer of TradeWinds, as saying. "Fuel costs were at an all-time high, capital and maintenance expenditures continued to increase, and liquidity remained impaired." TradeWinds Airlines, which is 77% owned by Watkins Aviation LLC, has at least $30 million in secured debt, Bloomberg notes. The company owes approximately $5.6 million in claims to its unsecured creditors, the report adds. TradeWinds Airlines told the Court that it intends to reject five leased 747s aircrafts of Boeing Co. that would save the company roughly $1.7 million per month, Bloomberg says. Scott Baena, Esq., of Bilzin Sumberg in Miami, represents the company. Reuters' Bill Berkrot reports that TradeWinds Airlines sued George Soros on June 30, 2008, seeking to recover $54.9 million judgment against C-S Aviation Services Inc., which is controlled by his business partner, Pernendu Chatterjee. The suit asserted that C-S Aviation was grossly undercapitalized for the purpose of defrauding potential judgment creditors, Mr. Berkrot says. About TradeWinds Airlines Headquartered at the Triad International Airport in Greensboro, North Carolina, TradeWinds Airlines LLC -- http://www.tradewinds- airlines.com/ -- operates A300-B4F freighter aircraft for domestic and foreign customers. The company has operations at Miami International Airport and in Puerto Rico. TRADEWINDS AIRLINES: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: TradeWinds Airlines, Inc. 5500 Northwest 36th Street, Room 586 Miami, FL 33122 Bankruptcy Case No.: 08-20394 Related Information: Jeffrey Conry, president, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 25, 2008 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Scott L Baena, Esq. 200 South Biscayne Boulevard 2500 Miami, FL 33131 Tel: (305) 350-2403 (sbaena@bilzin.com) Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/fasb08-20394.pdf TRANSNATIONAL AUTO: May 31 Balance Sheet Upside-Down by $3.1MM -------------------------------------------------------------- Transnational Automotive Group Inc.'s consolidated balance sheet at May 31, 2008, showed $8,588,191 in total assets and $11,733,418 in total liabilities, resulting in a $3,145,227 stockholders' deficit. At May 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $2,721,589 in total current assets available to pay $11,733,418 in total current liabilities. The company reported a net loss of $1,385,773 on total revenue of $2,810,231 for the first quarter ended May 31, 2008, compared with a net loss of $1,720,880 on total revenue of $1,580,043 in the same period ended May 31, 2007. Total revenue increased $1,230,188 or 78 % for the three month period ended May 31, 2008, as compared to the three month period ended May 31, 2007. The increase in revenue over the prior year period was attributed to the addition of 30 city buses during the current quarter and $785,126 of government subsidies received in the current period compared to $481,188 of government subsidies received in the prior year period. The decrease in net loss for the three month period ended May 31, 2008, was attributed to the reduction in corporate overhead costs compared to the previous year, and a decrease in financing costs during the current quarter compared to prior year. Full-text copies of the company's consolidated financial statements for the quarter ended May 31, 2008, are available for free at http://researcharchives.com/t/s?301f Going Concern Kabani & Company Inc., in Los Angeles, expressed substantial doubt about Transnational Automotive Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Feb. 29, 2008, and 2007. The auditing firm pointed to the company's significant loss for the year ended Feb. 29, 2008, and working capital deficit. As of May 31, 2008, the company has an accumulated deficit of $19,761,959 as well as a working capital deficiency of $9,011,829. About Transnational Automotive Based in Los Angeles, Calif., Transnational Automotive Group Inc. (OTC BB: TAMG) -- http://www.transauto-group.com/-- and its wholly-owned and majority-owned subsidiaries are engaged in the development and operations of mass public transportation systems in Cameroon, Africa. The company's current operations are comprised of an intra-city bus transit system in the capital city of Yaounde under the brand name, LeBus, and an inter-city bus transit system between Yaounde and Douala, known as LeCar. TRICOM SA: Court Allows Use of Credit Suisse' Collateral -------------------------------------------------------- At the behest of the Tricom, S.A. and its debtor-affiliates and Credit Suisse International, the U.S. Bankruptcy Court for the Southern District of New York approved a stipulation permitting the Debtors to use the bank's collateral, which consists of real properties and telecommunications equipment securing the $25,529,781 loan the Debtors obtained from the bank. As of the petition date, Tricom had made all interest payments required under the secured debt documents. However, Tricom has not made any postpetition interest payments to Credit Suisse. Subsequent to the petition date, the Debtors have continued to use the Credit Suisse collateral in the ordinary course operation of their businesses. In return for the continued use of the collateral, the Debtors shall pay to Credit Suisse: (a) amounts corresponding to the interest that would accrue on the bank's secured claims for $25,529,781 at the contract rates for each month beginning March 2008; and (b) fees and expenses of Credit Suisse's counsel. If the Debtors fail to make timely payments, they have to cure the default within seven days after receiving a notice of default from Credit Suisse. In consideration of the Ad Hoc Committee of Unsecured Creditors' suggestion, the Court ruled that all payments made by the Debtors will be considered payment in full of all accrued postpetition interest on account of Credit Suisse's secured claims in the event their Prepackaged Joint Chapter 11 Plan, or any other plan providing similar treatment of the bank's secured claims, is confirmed and becomes effective. The parties agreed that Credit Suisse will not be allowed to seek (i) additional postpetition interest; (ii) interest at any rate other than the non-default contract rate on any unpaid installment of interest; and (iii) penalties, fees or costs under the secured debt documents other than those provided for under the stipulation and the Plan Support and Lock-up Agreement. About Tricom S.A. Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. (Tricom Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) TRICOM SA: Court Adjourns Plan Status Conference Hearing to Aug. 7 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York adjourns the hearing scheduled for August 6, 2008, to August 7, 2008. Matters to be discussed at the August 7 hearing include the status conference on the confirmation of the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization. As reported in the Troubled Company Reporter on July 8, 2008, the Court adjourned to an indefinite date the hearing to consider confirmation of Tricom S.A. and its U.S. affiliates' Prepackaged Chapter 11 Plan and approval of the Disclosure Statement explaining the Plan. The Court said, however, did not reset the August 6, 2008 status conference hearing on issues related to the Plan confirmation. About Tricom S.A. Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. (Tricom Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) UBS AG: May Be Forced to Buy Back $25BB Illiquid Securities ----------------------------------------------------------- UBS AG's U.S. units -- UBS Securities LLC and UBS Financial Services Inc. -- are facing a multi-billion U.S. dollar securities fraud lawsuit filed by Attorney General Andrew M. Cuomo against the firms. The lawsuit charges UBS with falsely selling and marketing auction rate securities as safe, highly liquid, and cash-equivalent securities. However, Mr. Cuomo said the representations were deceptive as the auction rate securities market came under tremendous strain, leaving the securities with mounting liquidity risks that eventually blocked thousands of customers across New York and the nation from accessing their holdings. According to Mr. Cuomo, UBS customers are currently holding more than $25 billion in illiquid, long-term paper as a result of UBS's fraudulent misrepresentations and illegal conduct. Mr. Cuomo's investigation into UBS also discovered that as the securities market started to collapse, the bank's top executives quickly sold-off US$21 million in personal holdings of auction rate securities, but continued to market the securities to its consumers. Internal UBS e-mails subpoenaed by Cuomo detail top executives' efforts to sell-off personal holdings of auction rate securities. "Not only is UBS guilty of committing a flagrant breach of trust between the bank and its customers, its top executives jumped ship as soon the securities market started to collapse, leaving thousands of customers holding the bag," said Mr. Cuomo. "Today we bring the first nationwide lawsuit against UBS, seeking to recover billions of dollars for customers and sending a resounding message to the rest of the industry that this type of deceptive behavior will not be tolerated." Mr. Coumo stated that UBS misrepresented the risks of auction rate securities to its retail clients and other customers. UBS Financial Advisors marketed auction rate securities to UBS customers as liquid, short-term investments that were similar to money market instruments with interest rates that would reset at periodic auctions based on the bids submitted by market participants. Customers then received account statements that identified auction rate securities as cash equivalent securities. UBS's representations were false; in fact, UBS knew that the auction rate securities market was becoming increasingly strained and that UBS was considering various options with respect to auction rate securities, including letting auctions fail. Mr. Coumo went on to say that UBS's fraudulent sales practices proved effective - UBS stood out as a market leader in auction rate securities sales. As of February 2008, UBS had more than 50,000 customer accounts holding auction rate securities, including over 7,000 New York customer accounts. On February 13, 2007, UBS stopped supporting its auctions, and UBS customers learned, much to their shock and dismay, that they could not get access to billions in what they believed was as liquid as cash. In the final months of 2007 and in the early weeks of 2008, Mr. Coumo said UBS's management became increasingly concerned with the unsustainable growth in its holdings of auction rate securities and its need to support auctions in order to avoid auction failures. UBS created an auction rate securities working group specifically to address the floundering market. During this period, UBS also looked for ways to have its financial advisors sell auction rate securities and lessen the mounting pressure of UBS's growing inventory. While many options were discussed, the only one that was repeatedly implemented was to re-double sales efforts to UBS clients. Mr. Coumo also noted that despite UBS's aggressive marketing of auction rate securities to consumers, the bank's top management continued to demonstrate serious concern over the health of the overall market. Furthermore, at least seven working group members sold a collective US$21 million of their personal auction rate securities after the working group had been formed. Mr. Coumo's lawsuit seeks to require UBS to buy back auction rate securities from defrauded customers at par. It also seeks disgorgement of ill-gotten gains, restitution and other damages, and injunctions from further violations of New York's Martin Act. The lawsuit was filed in the Supreme Court of New York, New York County. The case is being handled by Assistant Attorneys General Pamela Lynam Mahon, Ethan Zlotchew, and Christopher Mulvihill, as well as Economist for the Division of Economic Justice Kitty Kay Chan, under the supervision of Investor Protection Bureau Chief David A. Markowitz and Executive Deputy Attorney General for Economic Justice Eric Corngold. UBS Responds The bank will "vigorously defend" itself against the allegations in the suit, and "categorically rejects any claim that the firm engaged in a widespread campaign" to shift auction-rate debt off its books and into client accounts, UBS spokeswoman Karina Byrne said in an e-mailed statement sent to Bloomberg News. "While UBS does not believe that there was illegal conduct by any employee, we have found cases of poor judgment by certain individuals and are evaluating appropriate disciplinary measures for these individuals," Ms. Byrne added. UBS Offers to Repurchase US$3.5 Bil. of Auction Preferred Stock UBS said in a July 15 press statement that it is actively developing a structure that would offer to purchase any and all auction preferred stock issued by registered closed-end tax-exempt funds and held by eligible UBS advisory and brokerage clients in their UBS accounts. If this structure is implemented and the offer is consummated, UBS clients who accept the offer will receive cash in an amount equal to the liquidation preference of their auction preferred stock plus any accrued and unpaid dividends (which is the amount they would receive if auctions for these securities were clearing). Implementation will be subject to a number of transactional structuring factors, including compliance with all applicable legal requirements. In order to be eligible for this offer, the auction preferred stock must have been held in the client's UBS account on July 15, 2008. These offers, if consummated, are intended to be financed by the net proceeds of remarketed preferred securities to be issued in one or more private placements by a newly-created Trust. This Trust will be controlled by UBS and will be consolidated in UBS's consolidated financial statements. The Trust Preferred will pay a dividend rate that will reset based on weekly remarketings performed by a designated remarketing agent. The Trust Preferred will be supported by a Liquidity Put or similar demand feature provided by UBS or another highly rated bank. It is anticipated that the Trust Preferred and the accompanying Liquidity Puts will be eligible for investment by money market funds. Auction preferred stock is a preferred equity security that pays dividends that are reset by an auction typically held every seven or 28 days. These auctions have consistently been failing since February 2008. Consequently, many holders desiring to sell these securities, including UBS clients, have been unable to do so, although dividends continue to be paid at pre-determined maximum rates. On July 15, 2008, UBS clients held an aggregate of approximately US$3.5 billion of auction preferred stock issued by registered closed-end tax-exempt funds in their UBS accounts (valued at liquidation preference). The proposed structure, and the proposed offer to UBS's clients, are intended to be fully supportive of ongoing industry efforts to resolve liquidity issues regarding auction preferred stock. UBS clients who elect not to sell their auction preferred stock in the proposed offer would retain their ability to sell in connection with implementation of any prospective industry proposals referred to above, as part of any redemptions by the issuing funds or in secondary market transactions. However, there can be no assurance when, or if, any of these alternatives will be available to holders of auction preferred stock. About UBS AG Based in Zurich, Switzerland, UBS AG -- http://www.ubs.com/-- is a global provider of financial services for wealthy clients. UBS's financial businesses are organized on a worldwide basis into three Business Groups and the Corporate Center. Global Wealth Management & Business Banking consists of three segments: Wealth Management International & Switzerland, Wealth Management US and Business Banking Switzerland. The Business Groups Investment Bank and Global Asset Management constitute one segment each. The Industrial Holdings segment holds all industrial operations controlled by the Group. Global Asset Management provides investment products and services to institutional investors and wholesale intermediaries around the globe. The Investment Bank operates globally as a client-driven investment banking and securities firm. The Industrial Holdings segment comprises the non-financial businesses of UBS, including the private equity business, which primarily invests UBS and third-party funds in unlisted companies. UNICO INCORPORATED: Chairman Ray C. Brown Buys 39,768 More Shares ----------------------------------------------------------------- Unico Incorporated disclosed that chairman Ray C. Brown purchased 39,768 shares of Unico common stock at a price of $0.096 per share. The purchase brings the total number of common shares that Mr. Brown owns to 72,223. Unico also reported additional improvements and repairs that have been made as a result of testing of the completed floatation circuit at the mill and processing facility at the Deer Trail Mine in Marysvale, Utah. The improvements were undertaken in order to facilitate more effective and efficient operations at the mill, and the company looks forward to the next steps at the facility, which are expected to include the production of concentrate. "I am pleased to add to my common stock position in Unico as the company is preparing to initiate processing operations at the Deer Trail mill facility," Mr. Brown commented. "Management believes that this property has tremendous potential, and we look forward to seeing additional progress at the site." Based in San Diego, California, Unico Inc. (OTC BB: UNCO) -- http://www.unicomining.com/-- is a publicly traded natural resource company in the precious metals mining sector that is focused on the exploration, development and production of gold, silver, lead, zinc, and copper concentrates at its two mine properties: the Deer Trail Mine and the Silver Bell Mine. As reported in the Troubled Company Reporter on July 21, 2008, Unico Incorporated's consolidated balance sheet at May 31, 2008, showed $6,644,783 in total assets and $16,809,803 in total liabilities, resulting in a $10,165,020 stockholders' deficit. At May 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $46,724 in total current assets available to pay $16,809,803 in total current liabilities. Going Concern Doubt HJ Associates & Consultants LLP, in Salt Lake City, expressed substantial doubt about Unico Incorporated's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Feb. 29, 2008. The auditing firm pointed to the company's significant losses, accumulated deficit and deficit in working capital. The company has incurred losses of $62,436,208 from its inception through May 31, 2008. It has not established any revenues with which to cover its operating costs and to allow it to continue as a going concern. USA SPRINGS: Taps Two Law Firms as Counsel; U.S. Trustee Objects ---------------------------------------------------------------- USA Springs Inc. asks the U.S. Bankruptcy Court for the District of New Hampshire for authority to employ the law firms of Hyatt & Flynn PLLC and Munroe & Chew as counsel. Hyatt Flynn and Munroe Chew will mainly give the Debtor legal advice with respect to its duties, obligations and powers as Debtor and perform all other legal that may be necessary and appropriate in furtherance of the Debtor's duties, obligations or powers. Munroe & Chew will be working together with Hyatt Flynn in connection with the Debtor's Chapter 11 case and may share fees received by it with that law firm. On June 25, 2008, Munroe & Chew received $4,500 from the Debtor representing advance payment in the Debtor's bankruptcy case. Munroe and Chew's attorneys currently bill at $220 to $300 per hour, $105 per hour for paralegals. Earl D. Munroe, Esq., currently bills at $300 per hour. Hyatt Flynn did not provide the Court with a schedule of its fees. Earl D. Munroe, Esq., a partner at Munroe Chew, assures the Court that the firm does not hold or represent any interest adverse to the Debtor or the Debtor's estate. Tto the best of the Debtor's knowledge, neither the law firm of Hyatt Flynn nor the firm of Munroe & Chew have any connection with the Debtor, its creditors, or any other party in interest, or their respective accountants or attorneys, which will represent an interest adverse to the estate. United States Trustee Objects On July 16, 2008, the United States Trustee for Region 1, objected to the employment of Hyatt Flynn and Munroe Chew by the Debtor, claiming that in order for a professional to be employed, the application must be accompanied by a "verified statement of the person to be employed, setting forth the person's connections with the Debtor, creditors, and other party in interest, their respective attorneys and accountants, the United States Trustee, or any person employed in the Office of United States Trustee.", pursuant to Bankruptcy Rule 2014. The United States Trustee tells the Court that there is no corresponding Rule 2014 Statement given by Armand M. Hyatt, Esq., and because of this, the application cannot be approved. The United States Trustee further tells the Court that at the organizational meeting of the Debtor's twenty largest unsecured creditors, Mr. Hyatt reported that he is a minority shareholder in the Debtor. In view of the foregoing, the United States Trustee has requested the Court to deny the Debtor's request at it pertains to the employment of Hyatt Flynn, and require Mr. Hyatt to state all parties to his fee agreement, and for such other and further relief as is just. Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). When the Debtor filed for protection from its creditors, it listed estimated assets of between $50 million and $100 million, and estimated debts of between $10 million to $50 million. USA SPRINGS: U.S. Trustee Names 3-Member Creditors Panel -------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, the United States Trustee for Region 1 appointed three members to the Official Committee of Unsecured Creditors in USA Springs Inc.'s Chapter 11 case. The Creditors Committee consists of: (1) W.C. Cammett Engineering Inc. Attn: Tim Cammett, Controller 297 Elm Street Amesbury, MA 01913 Tel: (978) 388-2157 Fax: (978) 388-0428 (2) DIOM, LLC Attn: Steven Collins, President 5 Tsienneto Road, Suite 78 Derry, NH 03038 Tel: (603) 231-0679 Fax: N/A Email: DIOM@comcast.net (3) NHSC Inc. Kenneth B. Bailey, Business Manager 202 Kent Place Newmarket, NH 03857 Tel: (603) 659-3559 Fax: (603) 659-7750 Email: kbailey@nhsc.net Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of between $50 million and $100 million, and estimated debts of between $10 million to $50 million. USA SPRINGS: Creditors Panel May Retain Harman Law as Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Hampshire has granted permission to the Official Committee of Unsecured Creditors appointed in USA Springs Inc.'s Chapter 11 bankruptcy case to employ Terrie Harman, Esq. and the law firm of Harman Law Offices, as its counsel. The Harman Law Offices will mainly advise the Committee with respect to its powers and duties in the Debtor's Chapter 11 case, as well as assist the Committee in analyzing and negotiating any plan of reorganization filed in the Debtor's case. Terrie Harman, Esq., the owner of the law firm of Harman Law Offices, assured the Court that his firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code, and that the firm does not hold any interest materially adverse to the Debtor, the Debtor's estate, and the Committee. The customary hourly rate charged by Terrie Harman is $260.00, and other rates are charged by timekeepers at rates beginning at $75.00 per hour which charges are billed and allocated to the specific matter for which services are rendered. Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of between $50 million and $100 million, and estimated debts of between $10 million to $50 million. USA SPRINGS: Files Schedules of Assets and Liabilities ------------------------------------------------------ USA Springs Inc. filed with the U.S. Bankruptcy Court for the District of New Hampshire, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property $ 27,000,000 B. Personal Property 100,000,335 C. Property Claimed as Exempt D. Creditors Holding $10,771,330 Secured Claims E. Creditors Holding 12,000 Unsecured Priority Claims F. Creditors Holding 3,130,571 Unsecured Non-priority Claims ----------- ----------- TOTAL $127,000,335 $13,913,901 Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of between $50 million and $100 million, and estimated debts of between $10 million to $50 million. VERSO TECHNOLOGIES: Mulls Sale of Switching Business to Pay Debts ----------------------------------------------------------------- Verso Technologies Inc. and its debtor-affiliates are planning a fourth sale of its assets under chapter 11 proceeding, Ben Fidler writes for The Deal. The assets for sale include voice-over- Internet-protocol applications and switching business, known as Softswitch, enabling end-to-end IP communications, The Deal says. The Deal relates that the Debtors have not named a stalking horse bidder but will do so prior to the sale, Ashley Ray, Esq., at Scroggins & Williamson said. Mr. Ray asserted that the auction and sale hearing dates will be disclosed after the U.S. Bankruptcy Court for the Northern District of Georgia issues an order approving the proposed bidding procedures, The Deal notes. The Deal says that the Debtors generated nearly $8 million from three previous sales. According to the Deal, Verso had sold off its Verilink and iMarc products to Communications Test Design Inc. for $3.4 million; its Mobile Blackhaul business to Comtech EF Data Inc. for $3.84 million; and some of its intellectual property to Foundry Networks Inc. for $500,000. The Debtors used the sale proceeds to pay part of its debts, including a $6.54 million owed to senior lender, Laurus Master Fund Ltd., The Deal adds. Laurus's debt has not been fully satisfied. About Verso Technologies Headquartered in Atlanta, Georgia, Verso Technologies Inc. (OTC:VRSOQ) -- http://www.verso.com/-- provides telecommunications service in the United States. The company and its affiliates manufacture, deliver, and provide support for hardware, software and service solutions primarily to large wireline, cellular, wireless and satellite carriers. The company and four of its affiliates filed for Chapter 11 protection on April 25, 2008 (Bankr. N.D. Ga Lead Case No.08- 67659). J. Robert Williamson, Esq., at Scroggins and Williamson, represents the Debtors in their restructuring efforts. The Debtors selected Logan and Company Inc. as their claims agent. The Debtors proposed to hire John L. Palmer at NachmanHaysBrownstein Inc. as their chief administration officer. The U.S. Trustee for Region 21 appointed creditors serve on an Official Committee of Unsecured Creditors. Darryl S. Laddin, Esq., at Arnall Golden Gregory LLP, and Michael S. Fox, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, represent the Committee in these cases. When the Debtors filed for protection against their creditors, they listed total assets of $34,263,000 and total debts of $36,657,000. VERTIS HOLDINGS: Court to Consider Chapter 11 Plan on August 26 --------------------------------------------------------------- ACG Holdings, Inc., informs parties-in-interest in a notice filed in its bankruptcy proceedings that Judge Christopher S. Sontchi will convene a hearing on August 26, 2008, at 10:00 a.m, to consider compliance of the Joint Prepackaged Plan of Reorganization of ACG Holdings, Inc., Vertis Holdings, Inc., and their respective debtor-affiliates with the disclosure and confirmation requirements under the Bankruptcy Code. The Joint Plan and its accompanying disclosure statement were filed by ACG and Vertis on July 15, 2008. The Plan contemplates a merger of the Vertis Debtors and the ACG Debtors and a comprehensive financial restructuring of the ACG Debtors' existing equity and debt structures. Any objections to the Joint Plan must be filed with the Court no later than August 19, 2008. It must be in writing, state the name of the objection party, and state with particularity the basis and nature of any objection to the Plan. About American Color Graphics American Color Graphics Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. The company filed and its four affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11467). Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors they listed estimated assets $100 million to $500 million and estimated debts of $500 million to $1 billion. About Vertis Holdings Inc. Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. -- http://www.vertisinc.com/-- is a provider of targeted print advertising and direct marketing solutions to America's retail and consumer services companies. The company and its six affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11460). Gary T. Holtzer, Esq. and Stephen A. Youngman, Esq. at Weil, Gotshal & Manges LLP represent as the Debtors lead counsels and Mark D. Collins, Esq. and Michael Joseph Merchant, Esq. at Richards Layton & Finger, P.A. represent as their Delaware local counsels. When the Debtors filed for protection from their creditors they listed estimated assets between $500 million and $1 billion and estimated debts of more than 1 billion. VERTIS HOLDINGS: Wants Filing of Schedules Extended to Sept. 25 --------------------------------------------------------------- Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure, Vertis Holdings, Inc. and ACG Holdings, Inc., and their debtors-affiliates are required to file, within 15 days of their bankruptcy filing: -- schedules of assets and liabilities, -- schedules of executory contracts and unexpired leases, -- lists of equity holders, -- schedules of current income and expenditures, and -- statements of financial affairs. However, Rule 1007-1(b) of the Local Rules of Practice and Procedure for the United States Bankruptcy Court for the District of Delaware, provides that if the total number of creditors in a debtor's Chapter 11 case exceeds 200, the debtor must file the Schedules and Statements within 30 days of the Petition Date. Vertis and ACG are currently required to file their Schedules and Statements by August 14, 2008. Vertis, however, notes that the preparation of the Schedules and Statements that relate to more than its 50,000 creditors will require significant expenditure of time and effort. Similarly, ACG asserts that given the large number of its creditors, the complexity of its businesses and its limited staffing, the 30-day extension period under Local Rule 1007-1(b) is not sufficient. For these reasons, Vertis asks the Court to extend the time within which it may file its Schedules and Statements through and including September 25, 2008. ACG asks the Court to extend its schedules and statements filing deadline, through and including September 29, 2008. In the event ACG seeks to establish a claims bar date, the Debtor seeks to have its Schedules and Statements filing deadline extended to a date that is 10 days after the filing of a Bar Date motion. Moreover, Vertis and ACG ask Judge Christopher S. Sontchi to permanently waive the requirement for them to file the Schedules and Statements upon the effective date of their Prepackaged Plan of Reorganization. About American Color Graphics American Color Graphics Inc. -- http://www.americancolor.com/-- is one of North America's largest and most experienced full service premedia and print companies, with eight print locations across the continent, six regional premedia centers, photography studios nationwide and a growing roster of customer managed service sites. The company provides solutions and services such as asset management, photography, and digital workflow solutions that improve the effectiveness of advertising and drive revenues for their customers. The company filed and its four affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11467). Pauline K. Morgan, Esq. and Sean T. Greecher ,Esq., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors they listed estimated assets $100 million to $500 million and estimated debts of $500 million to $1 billion. About Vertis Holdings Inc. Headquartered in Baltimore, Maryland, Vertis Holdings, Inc. -- http://www.vertisinc.com/-- is a provider of targeted print advertising and direct marketing solutions to America's retail and consumer services companies. The company and its six affiliates filed for Chapter 11 protection on July 15, 2008 (Bank.D.Del. Case No. 08-11460). Gary T. Holtzer, Esq. and Stephen A. Youngman, Esq. at Weil, Gotshal & Manges LLP represent as the Debtors lead counsels and Mark D. Collins, Esq. and Michael Joseph Merchant, Esq. at Richards Layton & Finger, P.A. represent as their Delaware local counsels. When the Debtors filed for protection from their creditors they listed estimated assets between $500 million and $1 billion and estimated debts of more than 1 billion. XM SATELLITE: Launches Offering of $400 Million New Senior Notes ---------------------------------------------------------------- XM Satellite Radio Holdings Inc. has launched an offering of $400 million aggregate principal amount of new senior notes. The offering is part of a series of transactions to refinance certain debt of XM in connection with the pending merger with SIRIUS Satellite Radio Inc. The offering will be structured in a manner that will permit it to be unwound if the merger is not consummated. The closing of the pending merger remains subject to the approval from the Federal Communications Commission and satisfaction of other applicable conditions. Headquartered in Washington, D.C., XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a satellite radio company. The company broadcasts live daily from studios in Washington, DC, New York City, Chicago, Nashville, Toronto and Montreal. The company also provides satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota. At June 30, 2008, the company's consolidated balance sheet showed $1.7 billion in total assets, $2.9 billion in total liabilities, and $60.2 million in minority interest, resulting in a roughly $1.2 billion stockholders' deficit. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said its ratings on XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. (CCC+/Watch Developing/--) remain on CreditWatch with developing implications, where S&P originally placed them on March 4, 2008, due to S&P's concerns over standalone refinancing risks XM might face if its merger with Sirius Satellite Radio Inc. (CCC+/Watch Developing/--) wasn't approved. XM SATELLITE: S&P Keeps Dev. Watch After Approval of Sirius Merger ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings on Washington, D.C.-based XM Satellite Radio Holdings Inc. and subsidiary XM Satellite Radio Inc., including the 'CCC+' corporate credit rating, remain on CreditWatch with developing implications, where S&P placed them on March 4, 2008. The proposed merger between XM and Sirius Satellite Radio Inc. (CCC+/Watch Dev/--) was approved by the FCC on July 25, 2008. CreditWatch Developing indicates that S&P may raise, lower, or affirm ratings. S&P could raise the ratings if the proposed merger is accompanied by significant refinancing and cost rationalization. S&P could lower the ratings with or without a merger if sizable maturities are not addressed and if the company cannot progress rapidly toward consistent positive discretionary cash flow. S&P initially placed the ratings on CreditWatch on Feb. 20, 2007, then with positive implications, based on the company's definitive agreement to an all-stock "merger of equals" with Sirius Satellite Radio. At the same time, Standard & Poor's also assigned its 'CCC-' rating to XM Satellite Radio Inc.'s proposed $550 million Rule 144A exchangeable senior subordinated notes due 2014, and placed the rating on CreditWatch with developing implications, along with the other ratings on the company. "We believe a combined company could achieve significant initial operating cost savings," said Standard & Poor's credit analyst Hal F. Diamond. A merger would also entail much longer term capital investments to rationalize and consolidate the two satellite and terrestrial infrastructures before all expected cost savings could be realized. * Moody's Reports: U.S. Credit Card Performance Mixed in May ------------------------------------------------------------ For May 2008, U.S. credit card performance, as tracked by Moody's Credit Card Indices, was mixed. Moody's Indices track key performance metrics of over $457 billion of U.S. bank credit card loans backing securities rated by Moody's. The credit card industry is in the midst of a challenging period and collateral performance will likely get worse before it gets better. For some trusts, a further weakening of the collateral performance may put downward rating pressure on some outstanding credit card ABS ratings — especially those relating to subordinate classes. Nonetheless, from an historical perspective excess spread, which is essentially the difference between the revenues and expenses in a securitized transaction, remains, on average, relatively high. In the credit card securitization market, excess spread is a keenly watched indicator of the relative strength of a given credit card trust. That's because when the three-month average excess spread falls below zero, the related bonds typically begin to amortize ahead of schedule. In May, the excess spread index was 7.09%. With the excess spread index at this level, most trusts are positioned to absorb substantial further deterioration in collateral performance before hitting a performance-based early amortization event. For example, holding all other performance metrics constant, charge-off rates could theoretically double on an average transaction from where they are today (6.41%) before causing an early amortization event. Moody's believes that the charge-off rate index is poised to surpass the peaks following previous recessions due to fundamental (i.e., challenging economic headwinds) and technical (i.e., normalization of bankruptcy filings) factors. In May, the charge- off rate index rose to 6.41% and has risen sequentially (month over month) for the past eight months. After the last two economic contractions, in 1991 and 2001, charge-off rates peaked at just over 7%. The delinquency rate, often a harbinger of the near-term trend in future charge-off rates, fell sequentially (month over month) for the second month in a row, though it was still up on a year over year basis. Early stage delinquencies remain relatively stable; however, delinquency roll rates and the proportion of late stage delinquencies remain comparatively high. That is, once cardholders fall behind on their credit card payments, it is increasingly difficult for them to become current again. In May, the payment rate index was 18.60% - more than a point higher than last month, but still down compared to a year ago. The payment rate is a measure of cardholders' willingness and ability to repay their credit card debt; therefore, the higher the payment rate, the stronger the credit, all other thing's being equal. On average, the payment rate has fallen this year compared to last as rising prices for necessities like food and fuel have made it increasingly difficult for cardholders to maintain credit card payments within the historically high range of 18% to 20%. The sequential improvement in the delinquency and payment rates may have been an indirect result of the economic stimulus payments mailed to more than 130 million households. It is doubtful that this sequential improvement will continue for long if the economy does not improve in the second half of the year. For the third month in a row, the average yield index on credit cards dropped from its year-earlier rate. May yield was 18.16%, down from 19.15% a year ago. Since September 2007, the Fed has cut its key Fed Funds Rate by a total of 3.25%. Over the same period of time, the yield on credit card portfolios has slid by just over 1.0%, indicating that the drop in interest rates has been passed through to cardholders on a lagged and muted basis. Risk-based re- pricing and the presumed increase in late fee revenues (as delinquency rates have risen) have helped to maintain yield at its current level while interest rates have fallen. Even variable rate cards, which typically adjust to the Prime or LIBOR rate, have "floor" rates below which rate drops will not be passed on to cardholders. These findings are detailed in Moody's Credit Card Credit Indexes for May 2008. MAY 2008 CHARGE-OFF RATE ROSE TO 6.41% The May charge-off rate rose to 6.41%, up 37% from the rate a year ago, 4.68%. The rise in May marks the seventeenth consecutive month of year-over-year increase and the eighth consecutive month of month-over-month increase. The charge-off rate measures those credit card account balances written off as uncollectible as an annualized percent of total loans outstanding. MAY 2008 DELINQUENCY RATE ROSE TO 4.47% The May 2008 delinquency rate, which measures the proportion of account balances for which a monthly payment is more than 30 days late as a percent of total balances, rose to 4.47% from 3.68% a year ago. However, the delinquency rate index fell month to month for the second consecutive month in May. MAY 2008 PAYMENT RATE FELL TO 18.60% In May 2008, cardholders paid back, on average, 18.60% of their credit card debts -- about 4.9% lower than last year's May rate of 19.55%. The drop in May marks the tenth consecutive month of year- over-year decrease. MAY 2008 YIELD FELL TO 18.16% Yield (the annualized percentage of income, primarily finance charges and fees, collected during the month as a percent of total loans) fell to 18.16% from 19.15% a year ago. The drop in May marks the third consecutive month of year-over-year decrease. Prior to this the yield experienced eleven consecutive month of year-over-year increase. MAY 2008 EXCESS SPREAD FELL TO 7.09% The one-month excess spread, which is the yield less the expenses of the related credit card asset-backed transactions (e.g. coupon, servicing fee and charge-offs), dropped to 7.09% in May from its year-prior level of 7.60%. However, the excess spread remains relatively high by historical standards -- the long-term average excess spread margin is 5.82%. * S&P Says Distress Ratio on US Investment-Grade Hits 252 Bps ------------------------------------------------------------- Standard & Poor's U.S. investment-grade composite credit spread tightened to 252 basis points on Friday, still 68% wider than at the five-year moving average and 24% wider than 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 also tightened, though more subtly, to 731 bps. By comparison, this is 27% wider than the start of the year and 72% wider than the five-year moving average. The speculative-grade credit spread is poised for continued volatility, commensurate with an escalation in speculative-grade defaults over the course of this year. * S&P Says Oil and Gas Industry Continues to Thrive on High Prices ------------------------------------------------------------------ Upgrades in the oil and gas industry continue to outpace downgrades by almost a 5 to 1 margin. Most companies in the sector are benefiting from the high prices for oil and natural gas, according to an article, "Ratings Roundup: High Prices Boost Global Oil And Gas Credit Quality, But Refiners Are Feeling The Heat." While exploration and production and oilfield services companies are enjoying the dizzying price of crude oil, refiners are taking a hit. Soaring crude prices and weakening gasoline demand in the U.S. have collapsed once lofty margins and deteriorated cash flows for refining companies. "E&P will report robust earnings for the first half of 2008 and oilfield services financial measures should continue to be strong, but the refining and marketing sector will struggle," said Standard & Poor's credit analyst Paul Harvey. Speculative-grade issuers have benefited the most from the robust hydrocarbon prices. In the first half of 2008, 15 of 21 upgrades and 21 of 24 positive outlook revisions were in the speculative- grade sector, which has a greater focus on near-term financial performance. Strong cash flows have allowed companies to pursue internal and acquisition-based growth, while maintaining healthy financial measures. The positive ratings trend is likely to persist as both E&P and service companies continue to generate above average financial measures and solid growth. * Chadbourne & Parke Names London and NY Lawyers as Partners ------------------------------------------------------------ Chadbourne & Parke LLP named David Gallai, Jennifer Handz, Dennis Hopkins and Scott Naidech as LLP partners in the firm. "These four new partners exemplify the high quality of attorneys across Chadbourne's practices," Charles K. O'Neill, managing partner, said. "They have impressed clients and colleagues with their outstanding legal skills and dedication to client service. I have followed their careers closely and congratulate each of them on this major achievement." Mr. Gallai, New York Office, Employment and Employee Benefits. Mr. Gallai practices in the areas of employment counseling, executive compensation, and employee benefits. He advises management on issues such as compliance with anti-discrimination, employee-leave, and related statutes, reductions in force, workplace policies and procedures, employee discipline and discharge, and wages and hours issues. He also advises clients on a broad range of executive compensation and employee benefit matters, including non-qualified deferred compensation arrangements. He was a Chadbourne summer associate in 1998 and has been a Chadbourne associate since 1999. Mr. Gallai received a B.A., cum laude, from the University of Pennsylvania in 1996 and a J.D., cum laude, from the Georgetown University Law Center in 1999. Ms. Handz, London Office, Russia and the CIS. Ms. Handz is a banking and finance specialist with a broad range of experience in project finance, secured and unsecured lending including acquisition financing, equity financing and restructuring focusing on Russia and the CIS, well as central and eastern Europe. She has represented lenders and borrowers on transactions in the property, telecommunications, oil and gas, municipal infrastructure, steel and manufacturing sectors. Ms. Handz had been an MNP partner in Chadbourne & Parke in London. Prior to joining the firm in 2006, she had been a senior counsel with the European Bank for Reconstruction and Development in London. Ms. Handz received both an LL.B. and a B.Juris. from the University of Western Australia in 1985. Mr. Hopkins, New York Office, Intellectual Property. Mr. Hopkins focuses his practice on all aspects of intellectual property, with an emphasis on patent, copyright and trade secret litigation. He has significant experience in all phases of IP litigation, including mediations, trials and appeals. In addition, Mr. Hopkins' practice includes counseling clients on issues relating to litigation strategies and intellectual property management. His IP experience also includes drafting and negotiating agreements and licenses, preparing written opinions, and providing general IP counseling to clients, including counseling on patent, copyright, trade secret and trademark matters. Prior to joining Chadbourne, Mr. Hopkins was an associate with Orrick, Herrington & Sutcliffe LLP in New York. He received a B.S. in nuclear physics/engineering from the United States Military Academy at West Point in 1988 and a J.D. from Rutgers University School of Law in 1998. Mr. Naidech, New York Office, Corporate. Mr. Naidech represents an array of private fund sponsors in the structuring, establishment and operation of their funds. He has formed buyout, growth capital, real estate and venture capital funds ranging in size from $100 million to over $16 billion of committed capital, including both geography-focused and industry-focused funds. In addition to private funds, Mr. Naidech advises clients on a number of other complex business transactions, including leveraged buyouts, recapitalizations, acquisitions and divestitures, as well as general corporate matters. Prior to joining Chadbourne as counsel, he practiced with Kirkland & Ellis LLP and Linklaters LLP, where he worked extensively with a number of prominent fund sponsors. Mr. Naidech received a B.A. from Emory University in 1994, a J.D. from Temple University's Beasley School of Law in 1997 and an LL.M. from the Georgetown University Law Center in 1999. About Chadbourne & Parke LLP Headquartered in New York City, Chadbourne & Parke LLP -- http://www.chadbourne.com/-- provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, the Middle East and Latin America. The firm has offices in New York, Washington, DC, Los Angeles, Houston, Mexico City, London, Moscow, St. Petersburg, Warsaw, Kyiv, Almaty, Dubai and Beijing. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- July 31 - Aug. 2, 2008 AMERICAN BANKRUPTCY INSTITUTE 4th Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Aug. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Do's and Don'ts of Investing in a Turnaround Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 17, 2008 TURNAROUND MANAGEMENT ASSOCIATION Real Estate / Condo Restructuring Panel Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Sept. 30, 2008 TURNAROUND MANAGEMENT ASSOCIATION Private Equity Panel Centre Club, Tampa, Florida Contact: http://www.turnaround.org// Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 ***